My ex did not pay a joint credit card he was ordered to pay in the divorce. He filed Chapter 13 instead. The credit card company is threatening to sue me. I owe my ex some money that is just now due under the divorce decree. I am afraid I will have to pay my ex's card and still owe the money to him. What is "setoff" in a Chapter 13 bankruptcy?
Setoff in bankruptcy, is a right to apply a credit, which is owed to a debtor by a creditor, against the debt of that debtor owed by that creditor.
It is not generally automatic, unless exercised by the IRS against a debtor's tax refund against a tax liability which is owed by the debtor.
You should consult an attorney that assists creditors in bankruptcy, or your family law attorney, to see if this principle may apply to you.
General legal advice is offered for educational purposes only. A consultation with a qualified attorney is required to determine specific legal advice as to your situation and applicable law. We are a debt relief agency and we help people file for relief under the bankruptcy laws.
It doesn't sound to me as though you have te right to a setoff, but you should consult a bankruptcy attorney to find out for sure. You should also try to determine whether the money you must pay to your ex was disclosed as an asset in the property schedules of the original petition.
A set off is a term used to describe the application of funds to an existing debt rather than a pay out to the Debtor for money owed. A very good example of a set off is the IRS retaining your tax refund for taxes you may owe for a prior year. Instead of sending you a check, they set off the amount you would receive against the amount you owe.
I hope this helps.
Steven A. Leahy
Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.
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