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Can you discharge marital credit card debt in bankruptcy?

by Dorota Trzeciecka on September 16th, 2017

Like many married couples, you and your spouse had credit cards in your own name, and you might have authorized your spouse to use your credit card, and vice versa.  Neither of you ever exercised the right to use them, while you were married.  In the process of  a divorce,  you and your ex-spouse agreed that you would each be responsible for paying your own credit card debts, and you held each other harmless from the obligation.  Your ex-spouse failed to follow up with the bank and fill out the paperwork to get his/her name of your accounts.  Fast forward; you’ve been  struggling after the divorce, because you have been running a household, which you used to run on two incomes, on just one income. You start using your credit cards.  Pretty soon, you’re at the limit, and way over your head with your credit card debts.  You’re contemplating filing bankruptcy to discharge your unsecured credit card debt, and start fresh. But can you?

At least one bankruptcy court said “no”.  Why? You were responsible for payment of your credit card debts under the divorce settlement agreement.  Your bankruptcy will affect your ex-spouse,  since he has neglected to get his name off the accounts following the divorce. The bank does not care that he did not make any these charges. They’re not going to let him off the hook, because his name is on the account, and he also may be the debtor with deeper pockets. So, when you declare bankruptcy, your ex-spouse is automatically notified as a co-debtor. And, he now has the right to object to your discharge of the credit card debts. The court is likely to agree with him, especially if he/she claims that you willfully and intentionally ran up the credit card debts, and your hopes for a fresh start may be shattered.

To prevent this from happening, make sure that after your divorce, you remove your ex-spouse as an authorized signer from all your accounts.

Contact me by phone at 305-439-0464, or by email at dorota@debtor-creditorlaw.com for more information about discharging marital debts in bankruptcy.