Today, Dr. Don answers questions about joint credit after a divorce and student loans on credit reports.

Divorce and credit

Dear Dr. Don,
My soon-to-be ex abused credit cards during our marriage (part of the reason for our divorce), including transferring balances to lower interest rate cards under my name. Because we live in a community property state, he is trying to stick me with half the liabilities. Because he was the breadwinner in the family (married 17 years), I know I will not be able to earn enough to pay these debts. He had a card in his name on all these accounts. Do you have any advice on how to handle the credit card companies? It's my understanding I cannot contest the status of any of these accounts until the divorce is final, i.e. debt consolidation or bankruptcy. I cannot afford a lawyer.
Movin' On

Dear Movin',
You say in your letter that you can't afford a lawyer. Remember that this column doesn't provide legal advice and we'll move forward from there. Credit card accounts opened during a marriage are almost always joint accounts. In joint property states, accounts opened during the marriage may automatically be the responsibility of both husband and wife, even if only one applies for the account. Unless they agree to a change, your creditors will continue to consider these joint liabilities even after a divorce.

Creditors will have differing policies regarding divorcing couples and joint accounts. You need to contact all of your creditors to discuss how they may be willing to assign ongoing liability for the account. Ask them to transfer your joint debt to the name of the person who will be responsible.

Close or cancel as many of the accounts as possible. Even if your name is taken off the account and the account is closed to future charges, you may still have a legal responsibility to pay existing balances. Inform all creditors, in writing, that you are not responsible for debts incurred after a specific date. Keep a copy of the letter for your records and send the original via certified mail.

I used an Experian publication, Divorce and your credit, in preparing this response. It's recommended reading along with Divorce and credit: Be sure you know the rules of the game.

Student loans on credit reports

Dear Dr. Don,
Can you tell me if a lender of a student loan can place the outstanding debt on the borrower's credit report if the borrower is still in school and has taken all steps to defer the loans? I am attempting to buy a car, and without my student loan debt my beacon score is over 700 but after factoring in my deferred loan (deferred until 5/2002) the score goes down to 514! Should I assume that I'd be living in a grass hut for the next 30 years?
Thatch Patcher

Dear Thatch,
Yes, a lender can place your student loan on your credit report, even if the loan is in deferment. A credit report provides lenders with your payment history, your outstanding debt, and your credit lines, among other things. Your student loan is a claim on your future income, just like any other debt. Creditors need to be aware that this obligation exists. Deferred student loans should show up on your credit report as being current, with an explanation line stating that the loan is in deferment. If you have been denied credit in the last 60 days, you can get a free copy of your credit report. Use this site's link library to contact the credit bureaus. Don't despair. The idea is to graduate, start making a decent income and then be able to afford the accoutrements of a successful life.

Bankrate.com writers base their answers on our editorial content and advice of financial professionals. We make no claims or representations about the accuracy, timeliness or completeness of such content, advice or the answers provided to you. Our content, advice and answers are intended only to assist you with your financial decisions. However, by its nature such information is broad in scope. Your financial situation is unique, and our content, advice and answers may not be appropriate for your situation. Accordingly, we recommend that you get different opinions and seek the advice of your accountant and other financial advisers before making any final decisions or implementing any financial or investment strategy.

-- Posted: July 28, 2000