After a divorce my ex wife and I were ordered to pay accounts under the divorce decree. But she decided she was not liable.
I was divorced in November 2007. My ex was under the divorce decree ordered to pay a one-year free financing loan we had (I was primary and she was co). Under the same decree I was ordered to pay her credit card (which she was primary and I was co). I was paying credit card and have proof. She decided she was not liable to pay the free financing loan because it had lapsed the one-year, interest accrued, then went to collections. She does not think she has to pay this now because it is in collections. I stopped paying her credit card and now we are summoned to appear for a civil summons on the credit card. She is remarried I am still single. I was going to pay the free financing loan but was advised against it by my divorce lawyer due to fact that I would still be responsible for the credit card. If I took her back to court she would only receive a slap on the wrist and possibly given another 6 months to pay. If she takes me back to court that would be possibly all that would happen to me for not paying her credit card. If we both don't pay the debts, other than our credit being severely damaged, what could the divorce judge do to us? Hold us in contempt? What does that mean? On the civil summons could they garnish our wages? Would this also affect her new husbands credit?
Thanks for the question. It is a bit complicated in that the answer involves a mix of state domestic relations and marital status law, civil practice and enforcement of judgments, and federal collections practices, credit reporting, and consumer protection. Since the outcomes could depend on which state has jurisdiction, you could throw in the law of jurisdictional conflicts. Since I am not an attorney licensed in your state, what you will be getting here is my opinion, which happens to be based on a lengthy experience in finance. You should not consider this answer as a legal opinion; you will need to contact an attorney in your home state for reliable answers to your legal questions.
Divorce and debt
I count a total of five questions embedded in your question, the first having to do with the divorce decree. The small portion of your decree referenced by you and concerning two of your family's unsecured debts seems quite normal -- in divorce agreements and decrees or judgments, parties are often ordered to pay debts that are primarily in the other partyÂ’s name. Equitable apportionment of the aggregate debt accrued during the marriage is the goal in these decrees, that is, an order which divides the debt according to ability to pay. Therefore, the legal liability (which of you actually signed the credit contract on a given debt) is usually not that important in divorce court.
The three most important factors here are the parties' relative incomes, the historic job stability for both in order to project future earnings, and the size of the debt, all of which leads to the determination by the court as to which party will have the ability to pay the debts by comparison to the other party. Your ex-wifeÂ’s statement that she did not make the payments as ordered by the court because the debt has gone to collections has no legal foundation of which I am aware. Regardless of the collection status of the debt, she is almost certainly required by the divorce decree to continue making payments.
You and your ex should get together for the purpose of forming a common front. If you do, that answers the third issue. The divorce judge will not do anything to you for not making the payments as ordered so long as neither you nor your ex-wife file a petition against the other for nonpayment of the debt ordered to be paid in the divorce decree. Neither of the two creditors can complain to the judge about non-payment as contempt of the order because they have no standing in your divorce case. They are not parties, and it is highly dubious that they could ever become parties.
The answer to the final sub-question is that, "yes," if the creditors receive valid civil judgments they may be able to garnish wages as to the either of you after the waiting periods and procedures required by your state in order to collect the judgment. To prevent garnishment or other judgment enforcement action, you should be able to negotiate directly with the law firm representing the creditors for a payment schedule making regular payments to pay all or a major portion of the debts at a level which you can afford.
In your question where you wrote that you had sought the advice of your divorce attorney on the issues concerning your continuing payment of the credit card debt, I think that you were on the right track. I always advise consumers to seek and follow all good legal advice by an attorney licensed in your state. The reason for this advice should be quite obvious in that the outcomes of most questions very often turn on a small difference in state law.
However I don't see where you continued your questions to your divorce attorney on the other matters and issues that concern you. If you are not sure about the quality of the answers from that particular attorney, it is not very much trouble to ask your local bar association for a referral to another attorney. An attorney referral for a consultation is frequently free of charge.
What parts of your divorce decree that you have chosen to divulge seems pretty standard in the large majority of states. Even though the judge swapped your consumer debt in the instance cited by you (where you pay hers, she yours) that is often done to even out the obligations according to the projected relative ability to pay between you and her. If this assignment of debt was made by your agreement, the judge will rarely impose a different outcome even if the debt assignment is apparently one-sided. In states where an income and expense statement for each party is required to be made a part of the record, the judge will have the opportunity to examine the relative economic status of the parties. The Court may inquire about the fairness of an agreement if the assignment of debt is unreasonable under the economic conditions revealed in the record. If the party accepting an unreasonable debt burden is represented by his attorney, such an inquiry would be rare. Once agreed to and incorporated into the court's decree in your case, a willful violation or refusal to comply could be the basis of a contempt action initiated by the party whose debt is being ignored by the party assigned to pay it.
In your case, if you and your ex agree not to file a contempt action, the judge will not be notified that his order is being flouted by both of you. In this way the penalty for contempt will not become an issue. However, if your ex is unwilling to work with you to resolve these problems, you may have little choice but to file a motion for contempt. There are two basic forms of contempt, civil contempt and criminal contempt.
The rules for civil contempt would probably be applied in this case, and you would be ordered to bring your behavior into compliance or report to the county sheriff to start an indeterminate jail term. Most states severely restrict the length of the time in jail (usually from 4 to 7 days). If you have not paid up to date by the end of that time, your contumacious position will be reviewed for possible extended commitment. By this time you would have paid up or taken the defense that you are without means to purge your contempt. If this holds true after evidence is taken, you must be released as indigent with a new date to report back for review. These procedures vary considerably from state to state, so you would need to consult an experienced local attorney for answers to your questions.
Since both you and the ex seem to be equally derelict in your debt assignments under the decree, I am sure you both can abstain complaining against the other. That is the only sure method to keep the judge from reviewing less than stellar performance of the court's orders.
Creditor standing in divorce court
The question has arisen whether the creditors could complain to the judge that they were not being paid as ordered under the divorce decree and have the issue of the parties' contempt raised in that manner. What must be remembered is that a divorce decree has only two parties before the court, and any order resulting from the proceeding affects modifies or rejects rights, assets, and statuses only between those two people. No matter how the rights or remedies of any other person or thing, even if profoundly affected, the effect is merely incidental and a coincidental benefit to the creditors. So, the effect of the decree seems to try to ensure that the creditors are paid in a reasonable manner. However the effect is coincidental, attempting to ensure that one of the parties is not defaulted on one of his/her obligations with the negative effect that default would have on the party. The creditors as entities are not being protected accept incidentally. Therefore the creditors cannot complain that the decree is being violated and they are not being paid, since they are not parties to the case and have no standing to complain to that court.
Collections & spousal liability
However the creditors could file their own cases in civil court (which the credit card company has done). I understand that they have sued you both, I guess her as primary signer of the initial credit contract, and you in some capacity. You should look into exactly what your liability is to the credit card. Again you need to see a local consumer attorney to look into your liability because if they just sued you and you actually have no liability, you could have yourself dismissed as a defendant in the pending case, and that solves the possible garnishment concern as well.
There is one other way that you could have incurred liability without having signed a credit contract as co-debtor, and that is if you are living now or at the time the credit card account was opened by your wife were living in a community property state. The debt incurred during your marriage was probably used for the benefit of both members of the marriage, so that is how liability would accrue to you IF community property laws apply. The community property states are CA, LA, NV, TX, AZ, WA, WI, ID, and NM. If you never lived in one of these states, you can dispose of the community property possibility as the basis for your liability.
If you are a proper party defendant to the credit card suit and a judgment is rendered for a specific amount owed, the judgment can be collected by wage garnishment against any defendant included in the judgment order singularly or simultaneously. The garnishment amount is normally 25% of net income (that is, after withholding) but this varies from state to state. The creditor does not have any duty to "even out" the judgment liability between you and your "ex." They can collect 100% from you or from her, whichever is more convenient for them. This kind of liability is called "joint and several liability." This may seem unfair, but you can still sue the "ex" if you end up paying the larger share of the debt.
Liability for premarital debt
Finally, it is very unlikely that your former wife's new husband will become liable on this card debt unless he explicitly assumes liability at this late stage, which would be somewhat pointless. Since the debt was determined before the new marriage, the debt could not be considered beneficial to the marital community. So, I cannot find liability for the even under the sometimes expansive definition of marital property in some community property states.
As you can see, this is quite a complicated issue, which is why I again strongly recommend that you consult with an attorney in your state. I wish you the best of luck in resolving these issues, and hope that the information I have provided helps you Find. Learn. Save.
Struggling with debt?
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Housing debt totaled $11.71 trillion and non-housing debt was $4.45 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1.739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Collection and delinquency rates vary by state. For example, in New Mexico, 13% have student loan debt. Of those holding student loan debt, 10% are in default. Auto/retail loan delinquency rate is 6%.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.