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.