Debt Obligations/Bankruptcy/Alimony


#1

Lots of questions-

  1. My husband and I have always kept all of our credit accounts separate and only have one bank account with both of our names on it. My husband has run up a huge credit card debt during the years of our marriage and is now considering filing for bankruptcy. If we separate and eventually divorce, will I be responsible for any of his debt, and will my credit be affected by his bankruptcy?

  2. Also, he is the only user of the checking account with my name on it. I don’t use it at all, but he has incurred several NSF charges recently. Will that affect my credit?

  3. He is not in a financial position to support himself due in part to his credit card problems. He received a huge workers comp settlement a few years ago which he has completely exhausted due to his spending habits. Is there a chance I may have to pay him alimony?


#2

The debt would be considered martial debt in any action for equitable distribution (unless you can successfully allege that the money spent was not for the benefit of the marriage). However as far as the creditors are concerned the debt is your husband’s and since your name is not on the debt you will not be responsible to the creditors.
Your husband can pursue an action in equitable distribution to recoup money from you to pay towards the debts.
The checking account can affect your credit, as your name is on the account.
As for alimony, if your husband can prove that he is the dependant spouse and is actually and substantially dependant on your income to sustain his lifestyle, you will likely pay alimony.


#3

Erin-
Thank you for your response.

I do have a few more questions for you, if it’s okay. In regards to the alimony question, I wanted to give you a little more information to see if it would have any bearing on the situation. We have always kept our finances separate due to financial issues he had when we met. He has worked the entire time we have been married, and for some time made the same amount I did. At one point he retired from his job due to injury, but continued working a second job while receiving his retirement benefits (this is allowed as long as he doesn’t surpass a set income from the job.) He also received a large workmans comp settlement, which he has completely depleted. Very little was spent on what would be considered to the benefit of the marriage (curious as to the definition of that.). I have handled the majority of the household expenses for the largest portion of our relationship, partially because of his inability to manage money. Would I still be liable for alimony if his situation is due to his own poor money management and not because he has no other form of income?

He is also considering filing for bankruptcy. Would this hurt me if he does this before we divorce, even if it does not include anything that is in my name?

Also, if he does not ask me to bear some of the load of his debt, or for alimony, is there still some legal obligation I would have to pay for these things?

Thank you so much for your help.


#4

Money spent for the benefit of the marriage is pretty much anything including clothing and goods only for the debtor spouse. So long as the money was not spent on a paramour, or excessive gambling it will likely be considered marital debt.
Alimony will be an issue if you are the supporting spouse which seems to be the case as you paid for the majority of the bills during the marriage. This is the case even though you kept your finances separate during the marriage. However his wasteful spending can also be considered by the court.
The bankruptcy should not hard your credit since the debt is in his name, though you may be held liable for a portion of that debt if he pursues and an action for equitable distribution.


#5

Thanks Erin.

So if he does not pursue the equitable distribution option, I am under no legal obligation to assume any of his debts, or pay alimony, is that correct?

I think that should be the last question!

Thank you.


#6

You are under no obligation to contribute to his debts, or to pay him alimony unless he pursues an action for either claim.


#7

You hear about credit card debt all the time. What do you do when the debt is medical bills? Most of my debt consists of medical bill leftovers (the amount after insurance) that has gone to collection. I have not seen anything that deals with those types of bad credit. They say medical is not supposed to affect your credit but it does.


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#8

Medical bills are considered in the same way credit card debt is. It is marital in nature if incurred during the marriage, and subject to distribution.


#9

[quote=“LisaM”]Lots of questions-

  1. My husband and I have always kept all of our credit accounts separate and only have one bank account with both of our names on it. My husband has run up a huge credit card debt during the years of our marriage and is now considering filing for bankruptcy. If we separate and eventually divorce, will I be responsible for any of his debt, and will my credit be affected by his bankruptcy?

  2. Also, he is the only user of the checking account with my name on it. I don’t use it at all, but he has incurred several NSF charges recently. Will that affect my credit?

  3. He is not in a financial position to support himself due in part to his credit card problems. He received a huge workers comp settlement a few years ago which he has completely exhausted due to his spending habits. Is there a chance I may have to pay him alimony?[/quote]

If you signed a prenuptial agreement, you will not be reliable for his debts. And with regard to paying of spousal support there are many factors that will be debated in the court. The court will decide on the factors of time separated, relative income of the spouses, the health of both parties, and financial stability. However, you’ll be required to give him support due to age or health considerations.