Hold Harmless & Garnishing Wages

Part (1) – hold harmless. I got divorced and there was joint debt of about $28,000. She has a “hold harmless” indemnity clause on the debt against me in the divorce agreement. I haven’t made a payment on the debt in 3 or so years and plan on going bankrupt.

1) Will the “hold harmless” prevent me from going bankrupt on it?

Part (2). Creditors call once and awhile looking for me but she hasn’t had to deal with creditors for that debt in over a year as to her. She still has a mortgage at the bank where those debts were. When creditors called a year ago she argued that she’s not responsible for the debt as I took it over based on the divorce agreement. I expect when I go bankrupt things will heat up again and they will start calling for her. She is a single mom with 2 boys and makes maybe $500-$600 week.

2. Is it a real possibility that they will garnishee her wages to go after that debt? Garnishee rules are harsh – $350 month max income?!!? Yet, she won’t pay. If she was taken to court would a judge see her limited income as a single mom and not allow a garnishee?

I worried for her and the kids and wonder if I will be ever able to go bankrupt based on the fact they can come after her?

2 Responses to “Hold Harmless & Garnishing Wages”

A licensed trustee said...

Your question is complicated.

In general, a creditor is not required to recognize a deal that you made with your ex-spouse to be responsible for their debts. If your ex-spouse co-signed a debt, they are still responsible for it in the eyes of the creditor, regardless of the deal made between the two of you.

Therefore, it is possible that the creditor will pursue your ex-spouse if you go bankrupt.

There are many factors to consider, so both you and your ex-spouse should contact a licensed trustee to determine the impact of your bankruptcy on both of you.

Anonymous said...

Dear Sir / Madam ,

I have some questions I am wondering if anyone can help me with . In 1996 my ex husband and I bout a house . However due to continued physical and mental abuse to me and mental abuse and terror to the children we divorced . He was charged for assault causing bodily harm and assault and battery if my memory is correct . My doctor submitted several records . When my ex got out of jail repeatedly drinking under the influence he went back for the other convictions . Although he had a restraining order he still came around at night as well he continued his verbal threats in notes he left in our yard . While the children and I were so terrorized we left the province . I had a breakdown and could not work , as well I had serious other health issues . Consequently the house was foreclosed on in I think 1998 . After all these years I get a phone call telling me I owe 20000 dollars in the difference of price . This out of the blue . I went on permanent disability four years ago . Last august I began a minimum wage job averaging 4 to 5 hours a day . This job may not last due to the recurring nature of my illness . I still have two children at home . I make 7 0r 8 hundred dollars a month , my husband is on EI between 6 or 9 months a year . How can this surprise debt I never even knew existed be sprung on me like this . Should I file bankruptcy . For so long I could barely buy groceries , or pay rent , let alone anything nice for the children . We still live payday to payday .