192 DIVorCe wItH DeCenCY
Even a long-term or permanent physical separation (including one
that may have entailed an informal or de facto division of all major
assets), will not be recognized by the law in the event that one of the
spouses dies without having completed an actual divorce. Bottom
Line: Divorce ain’t over until the (fat?) judge sings.
— Contributed by attorney R. Barrie Michelsen, associate,
Coates & FreyDivorce and Bankruptcy
Joanne got divorced and her husband Steve was awarded the
BMW on which both parties had signed the loan note. Steve
moved to a new town, acquired a new wife, car, and house. Then,
he promptly filed for bankruptcy, reaffirming his debts on the
new house and new car, but disallowing the debt on the now-
repossessed BMW. Steve was discharged on the BMW debt by the
Bankruptcy Court. The finance company then pursued Joanne on
the deficiency and she came to me for advice on what to do. I had
to tell her that her choices were limited to either paying off the
debt herself and thereby keeping her credit good, or else follow-
ing Steve into Bankruptcy Court in order to discharge the debt,
but thereby ruining her own credit for a long time.
Lessons learned:
The provisions contained in a divorce decree are not binding upon
your creditors. If the debt has your name on it, you may be smart to
take it and try to even out the property division by taking other “off-
set” assets. Otherwise, you had better be prepared to pay it later if the
ex-spouse defaults on payments or files for bankruptcy.
— Contributed by attorney John D. Hughes, associate,
Coates & FreyNot Everything Is As It Seems
“You have got to be kidding.” That is all I could think of to say
after Jonathan, a young married father of two, told his shocking,
almost unbelievable story.
“I’m as serious as a heart attack,” said Jonathan, his eyes star-
ing directly at me with no emotion at all. I’ll never forget that
moment or the case. Ever.