Handling Divorce Debt

Your Legal Credit Rights After Divorce

I was astounded to read in the newsletter, "Making Ends Meet", that the author would advise women to negotiate and pay collectors for accounts that were held jointly and for which the ex was court ordered to assume.

This is credit suicide! As a Certified Divorce Financial Analyst and a former employee of Fair, Isaac (the leading credit scoring company), I can tell you that paying off a collection that you don't owe is irreversible and will haunt your credit for 7 years.

The ONLY way to ensure your future financial health is to get the collections REMOVED from the report. If you can show that the debt was assigned, by a Judge, to the ex, the collection agency has little ground to make the argument that you owe it. They would have to back it up in court, the same county most likely where the Judge assigned it to you ex. They know they will not prevail in court, so they are much more likely to compromise.

IF the debt was assigned to the ex, and he hasn't paid it, the quickest way fix it is to make a deal with the collection agency to pay it under the written promise they will remove the listing in its entirety, not just list it as paid. Then you can take that receipt to the Judge, with the order that the ex pay it, and turn it into a Judgment so you can attach property or wages for repayment.

In my profession, I do see husbands who refuse to pay or cannot pay these debts. I also see wives who run up the tabs on the cards prior to filing for divorce, and the husbands getting stuck with the bill. Divorce can be a devastating nightmare, or it can be worked through by both parties towards a Sustainable Settlement. Neither party should be financial ruined, but both parties should understand that a lifestyle previously shared by one household, cannot support two.

Article by Adryenn Neuenburg, a Certified Divorce Financial Analyst and a former employee of Fair, Isaac (the leading credit scoring company).

How to Find Out What's Being Reported

Unfortunately, divorce can wreck your credit if you're not careful. Since most women are unaware that creditors may try to hold them responsible for their ex's marital debts, it's a good idea to find out what is being reported on their credit report.

By getting regular copies of your credit report, you can determine if your ex's debts are being reported under your credit file. Since you're entitled to a free annual credit report from each of the three credit bureaus, you can space out the reports every 4 months to monitor your credit fairly easily. You can go to www.annualcreditreport.com to get started. 

While you may not be able to get these accounts removed from your credit report if the account is current and being paid as agreed, you can stay on top of the situation and be pro-active if things change. If the accounts aren't being paid and the collection agencies won't work with you, you may need to consider the options discussed above. 

Here are some more articles that discuss various issues concerning how debts are handled in divorce and how you can protect your credit:

  1. Divorce
  2. Financial Issues in Divorce
  3. Handling Divorce Debt