Obligation to Pay a Joint Marital Debt Creates a Nondischargeable Debt

The following is a summary of a Minnesota bankruptcy case or a case relevant to Minnesota bankruptcy law.

Minnesota Bankruptcy Case:

McCarthy v. McCarthy (In re McCarthy), 2010 WL 3269801 (D. Minn. 8/17/10) (Doty, J.).

Case Summary:

Obligation to Pay a Joint Marital Debt Creates a Nondischargeable Debt to Former Spouse

The parties to this adversary proceeding were divorced in 2006. The defendant was awarded a car and ordered to make the car payments. When he failed to do so and the credit union which held the secured claim sued the debtor and the debtor’s husband. He sued her in state court and got a judgment for the amount which she had to pay on the car loan. The debtor filed bankruptcy which lead to the dischargeability complaint under 11 U.S.C. § 523(a)(15). Judge Kishel held that the judgment that required the debtor to, in essence, hold her ex-husband harmless from any liability he had on the car loan was a debt to a former spouse incurred in the course of a divorce or separation. Judge Doty affirmed Judge Kishel’s grant of summary judgment and his denial of rehearing.

Credit: The preceding was a summary of a case relevant to Minnesota bankruptcy law. The case summary was prepared by the U.S. Bankruptcy Court through Judge Robert J. Kressel & attorney Faye Knowles.