 Creditors
don't care about your divorce decree
|  Dear
Bankruptcy Adviser,
My ex-wife, a foreign national, received a credit
card. Due to a language barrier, I was placed on the account a couple of years
later, as that was the only way the bank personnel would talk with me. Now we
are divorced, and the divorce decree lists her as responsible for that debt. However,
it is now shown on my credit report. What course of action can I take to get it
removed; if any? -- Norman
 Dear
Norman,
Here's the basic truth, Norman: Your divorce
decree has nothing to do with your legal obligations to creditors. You signed
your name to a piece of paper, and that gives you the legal responsibility for
the debt.
You might be thinking, "Hey, that's not fair. She agreed
to pay that debt and that is reflected in our settlement." Unfortunately,
your creditors weren't invited to your settlement. To them, you are both 100 percent
obligated to pay back the debt and each of your credit reports will reflect that.
So, let me cut to the chase: You have two choices if you want to get this
debt removed from your credit report. You can declare bankruptcy or you can get
your spouse to pay the debt as agreed. Neither option sounds very good.
However, divorce often leads to bankruptcy. As documented in, "The Fragile
Middle Class," written and researched by Teresa A. Sullivan, Elizabeth Warren
and Jay Westbrook, one of the three most common reasons people file for bankruptcy
is divorce. Divorce creates two rent payments, two utility bills, etc., and in
general raises each person's cost of living because the monthly expenses are not
shared anymore.
Your divorce attorney should have asked you how your
cash flow, after your settlement, would be finalized. He should have also informed
you that bankruptcy might be an option. If you're not in touch with an attorney,
now's the time for a consult. You will likely get a few questions answered for
free, and if you're eligible for bankruptcy, it's better to find out earlier than
later.
Finally, let me say something briefly on marriage. I've only been
married a year, but in my work I've seen 10 years of relationships going awry
because of money problems. Here's what I've learned: It's best to have all your
(credit) cards on the table. I believe that an open, transparent conversation
about money is essential to a healthy relationship. As for the rest, that's outside
my jurisdiction.
Justin Harelik is a practicing
bankruptcy lawyer in the Los Angeles office of Price Law Group. To ask a question
of the Bankruptcy Adviser go to the "Ask
the Experts" page, and select "bankruptcy" as the topic. |
