As a family law attorney, I have seen several situations where a party previously entered into a divorce settlement agreement and agreed to take on certain debt and, subsequently, became unable to make payments on the debt. The situation becomes even trickier where one spouse agreed to pay a debt that is in the name of the other spouse.
Consider a situation where, under a divorce settlement agreement, the husband kept a car that was in the wife’s name, and the husband was required to make payments on the car. A couple of years later, the husband is no longer able to afford the car payments. What happens?
One option is the wife can file a Petition for Contempt against the husband to try to force him to resume making the payments. A potential problem with this route is that the husband has to miss a payment before the wife can file the petition. In addition, while a judge can hold the husband in contempt and order him to resume the payments, if the husband is unable to do so, the wife’s credit will continue to take a hit for every missed payment.
Another option the wife may consider is trying to reach an agreement with the husband wherein the husband would give her the car back, and she would resume making payments. Under this option, she will protect her credit. If the parties choose to go this route, however, the agreement must be put into writing. If the wife had a lawyer represent her in the divorce, I would suggest that she go back to him or her to draft a document that clearly spells out a new contract between husband and wife. This is because there is a Court Order that says that the husband received the car in the divorce. The Order does not prevent the husband from voluntarily giving the wife the car at issue, but the transaction needs to be in writing in case an issue comes up later and the husband wants the car back.
By Patrick L. Meriwether, Partner, Meriwether & Tharp, LLC