What a Hold Harmless Clause Does
A hold harmless clause in a divorce decree is a promise by one spouse to indemnify the other for specific debts. Example: "Husband shall be responsible for the Visa card ending in 4532 and shall hold Wife harmless from any obligation thereon." This means the husband agreed to pay the debt and reimburse the wife if she has to pay.
Hold harmless clauses are enforceable between the spouses. If your ex violates the clause, you can seek enforcement in family court, including contempt proceedings, attorney fee awards, and money judgments.
The Critical Limitation
Hold harmless clauses do not bind creditors. The creditor wasn't a party to the divorce and isn't affected by agreements between spouses. If the credit card in the example above is a joint account, the credit card company can still pursue the wife for the full balance regardless of the hold harmless clause.
This means hold harmless clauses are only as good as the indemnifying spouse's ability and willingness to pay. If your ex files bankruptcy, loses their job, or simply refuses to pay, the hold harmless clause gives you a claim against them but doesn't prevent the creditor from coming after you first.
Hold Harmless and Bankruptcy
Here's where it gets complex. If the spouse who agreed to hold the other harmless files bankruptcy: in Chapter 7, the hold harmless obligation is generally non-dischargeable under 11 U.S.C. 523(a)(15). This means even after bankruptcy, they still owe you the indemnification. In Chapter 13, the obligation may be dischargeable if it's classified as a property settlement rather than support.
However, non-dischargeability only helps if the debtor has assets or income to pay. If they're truly insolvent, a non-dischargeable judgment is still uncollectible. The practical protection is limited when dealing with an ex who is genuinely unable to pay.
Frequently Asked Questions
Can a hold harmless clause protect me from wage garnishment?
Not directly. The creditor can still garnish your wages on a joint debt regardless of the hold harmless clause. You would then need to pursue your ex for reimbursement under the hold harmless provision. It's a two-step process that doesn't prevent the initial harm.
Is a hold harmless clause the same as an indemnification agreement?
Essentially yes. Both terms describe a promise to protect the other party from liability on specific debts. The legal effect is the same: if you're forced to pay, the indemnifying party must reimburse you.
Should I insist on a hold harmless clause?
Always. While the protection is imperfect, it's better than nothing. Without a hold harmless clause, you have no contractual right to reimbursement if you end up paying your ex's assigned debts. With the clause, you have a clear legal basis for recovery.
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