Ex-Spouses as Creditors
Ex-Spouses As Creditors
Many people file bankruptcy as a way to stop a judgment or garnishment from being entered against them or to lift the judgment or garnishment if one is already in place. Most civil judgments can be included in the bankruptcy, and the creditors can no longer make any attempt to collect on the debt in most circumstances. Many debtors question whether this same rule applies to judgments their ex-spouses may have against them and whether their ex-spouse can file a judgment against them in the bankruptcy.
The protection the automatic stay guarantees through the bankruptcy proceeding would halt any judgment or potential judgment a person’s ex-spouse may have against them or may attempt to place on the debtor. However, there are exceptions to the automatic stay with regard to ex-spouses. An ex-spouse should be listed in the bankruptcy schedules by the debtor like any other creditor. Their name, address, amount, and consideration of the debt should be listed. The ex-spouse would then receive notice from the bankruptcy court like any other creditor. The ex-spouse would have the ability to file a proof of claim and submit it to the court per the proof of claim deadline listed in the notice.
In a no asset Chapter 7 bankruptcy, the ex-spouse’s claim will generally be discharged. However, in a Chapter 13 where the debtor is paying back some of their debts, the ex-spouse may be paid all or a portion of their claim along with other creditors, especially if their debt is classified as priority.
Certain debts are not able to be discharged through a bankruptcy and must be paid in full by the debtor, such as child support and maintenance/alimony. The debtor’s past due and current amount for these debts must be paid in full. In a Chapter 13 bankruptcy, pre-petition back child support and maintenance amounts would be paid through the plan over a period of 36 to 60 months. The debtor is also expected to maintain the current monthly child support and maintenance as well. Since child support and maintenance are considered priority debts, they are paid before other unsecured creditors in a Chapter 13. If the debtor does not believe the ex-spouse’s proof of claim to be correct, they can file an objection, and a hearing may be necessary to determine the correct amount owed to the ex-spouse.
If you would like more information about this, please contact a St. Louis or St. Charles bankruptcy attorney.