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Steve Bucci, the Bankrate.com Debt AdviserIrresponsible ex not paying joint debt

Dear Debt Adviser,
After a divorce, my ex was responsible for paying on several credit cards. The credit card companies refused to remove me from the accounts, so the judge ordered my ex to pay them in a timely way to avoid credit problems for me. He did not pay them in a timely way and it took three months for the creditors to contact me and ask me to pay since he didn't. I have begun making payments and filed a contempt order with the court. But each credit card company and their collection agencies (for those who sold the debt) reported delinquencies and collections on my credit report. Is there any way to dispute this on my credit? -- Barbi

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Dear Barbi,
I am always sorry to hear of another divorce, but at least you didn't mention any kids, so I hope this was just between the two of you. The unfortunate reality is that it is much harder to divorce your joint financial obligations than it is your spouse. As you have found, joint credit card accounts remain joint accounts until the account is paid off and closed. The reason for this is that when you opened the joint accounts you entered into a legal agreement with your creditors, in essence giving them your word that they would be paid back according to the agreement. A divorce decree issued by the court does not change that. You gave your word and they are holding you to it.

Another unfortunate reality that I hope your attorney brought to your attention is that spouses who are assigned certain accounts to pay in a divorce decree do not always follow through on those assignments. Some fail to pay because they truly cannot afford to; others don't pay because they don't manage their finances well, and some don't pay out of spite. You get the picture. In any event, counting on an ex-spouse can be a high-risk venture!

So how do you protect your credit rating and not end up paying everything for which your ex-spouse was responsible? First, let's protect your credit. Get a copy of your credit report from each of the three major bureaus and find out exactly what has been reported and by whom.

Next, submit a 100-word statement to each of the bureaus explaining your situation. It will not change what is reported, but many lenders will pay more attention to your positive information and disregard the negative if there is a logical explanation. In the future, when you apply for credit or a loan, disarm the situation in advance by explaining the situation before they check your credit. Having a copy of the divorce decree assigning the accounts to him is also a good idea.

To not end up paying everything, communicate with your ex and determine if he plans to meet his obligations and when. I realize that communicating with an ex-spouse can be unpleasant. However, the more information you have, the better off you will be to make decisions concerning your current situation. If things are really bad between you, communicate in writing through a lawyer.

Here's the bottom line: If he doesn't make the payments, you should. It's your credit on the line.

Regardless of how the conversation with your ex goes, you should follow through on the court action. One way to assure that your credit is not damaged any further is to have your spouse transfer the balances of the delinquent accounts to a credit card in his name only. At this point, he may not qualify for a card in his own name, but the court may decide that's his problem!

Ideally, when a person divorces, all joint accounts should be dissolved. Home mortgages should be refinanced in one person's name or the house sold. Car loans should be refinanced or the car sold. Credit card accounts should be closed and the balances transferred to separate credit card accounts in each spouse's name.

This may not have been the case in your divorce, but it is not too late to work toward dissolving any joint credit that you still have with your ex.

Good luck!

The Debt Adviser, Steve Bucci, is the president of Money Management International Financial Education Foundation and the author of Credit Repair Kit for Dummies. Visit MMI for additional debt advice or to ask a question of the Debt Adviser go to the "Ask the Experts" page and select "debt" as the topic.

Bankrate.com's corrections policy -- Updated: June 30, 2006
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