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Credit Ruined By Ex-Spouse?

Be careful. An ex-spouse can ruin your credit long after the divorce.  We hear it all the time.  There is a divorce decree that states that one spouse is liable for certain old credit card bills.  Years later, that spouse discontinues making payments for whatever reason.  The spouse that was not supposed to be liable for the account finds a damaging mark on their credit report stating that the account is delinquent.  The natural reaction would be to immediately dispute your credit report and wave the divorce decree in front of them as proof of your innocence.  Don't be surprised to find out that the credit bureaus and creditors won't remove this from the credit report - and they don't have to. 

One common misconception is that a divorce decree, coming from the court, means you don't owe the money anymore.  That's not necessarily true.  The divorce decree is only an agreement, or legal recognition of legal obligations between the two spouses only.   Any person or company that was not part of that court proceeding cannot be bound by the court proceeding.  They never had their day in court, and perhaps would have argued to the court that the other spouse should be responsible for the bill because, perhaps, they are a better financial risk.  In the end, if the spouse that assumes responsibility for an account does not pay, the remedy is only against that spouse, and not the creditor.  If the creditor had a contract with both spouses, the creditor can look to either one for payment regardless of whether a divorce decree only says one of them is responsible. 

Here are some steps to take to protect your credit:
1) Keep your credit separate as much as possible.  Homes and cars typically need both of you to co-sign, but credit cards should not.  Any credit you have had before marriage should not be altered to put the other on as a co-signer.  You can make your spouse an authorized user on the account without making them a co-signer.
2) After a divorce, do your best to keep up on how the other is doing with their payments on these accounts.  If you able to communicate with them about it, that's great.  However, it being a touchy subject, that is not always an option.  Watch your credit report.  You can buy into credit monitoring systems to watch your credit report and notify you the moment something goes wrong.  From that point, you can take steps to correct or minimize the harm to your credit. 
3) Beware of debt collector harassment.  Collectors will call without knowledge or care that the account was supposed to be paid by the other spouse.  They will tell you that you owe it (they may be right) and threaten you with litigation.  Regardless of whether you may owe the debt, debt collectors cannot violate the Fair Debt Collection Practices Act
 
To read more, click here.

SmithMarco, P.C., has over 30 years of combined experience practicing law protecting the rights of consumers around the country have been protecting consumers since 2005. If you need help disputing errors on your credit report, harassing debt collection calls or debt defense, check our website or call one of our attorneys now. 

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