Long-gone spouse still causes problem

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Dear Debt Adviser,
I have been divorced 13 years. In the divorce, she got the credit card debt of $1,500, I got everything else. I have fulfilled everything that was asked of me in the divorce decree. 

I was contacted by the credit card company back around the time of the divorce (1995) telling me she was late on payments. I had the card closed, and I told them there are to be no future charges on this card ever. Also in the divorce I gave her $27,000 in cash.

She paid for some plastic surgery, took a vacation and pretty much blew the whole thing. It’s now gone to collections, she has not made a payment in over a year, and the balance is now $6,500. What can I do? 
— Mark

Dear Mark,
Clearly, your ex believes in the adage of paying herself first, although this is not exactly what the saying meant. Anyone who has not been divorced might think that after 13 years all unwanted ties with an ex would be broken. However, my experience is that while they may diminish, they merely remain dormant, to be awakened like some unsuspected natural disaster at the most inconvenient times.

The short answer to your question is to go see your attorney and have a letter sent to the collector. I know you are thinking that the cost of a legal visit and a letter may be unfair, but it is cheap by comparison in allowing you to snip one more tie to the past.

As you pointed out in the letter, your ex-wife had money to pay off the debt back when you were divorced and used the money for other things. If she didn’t pay then, chances are unless something has changed, she won’t pay now. Given that the balance on the account is now $6,500 and was $1,500 without the possibility of adding purchases, my calculation shows that she has not made many payments over the past 12 years.

If your name is on the account as a responsible party, the fact that your divorce decree states your ex is responsible is not going to help you much with the collectors. Unfortunately, your divorce decree only applies to you two and does not negate the contract that you signed with the creditor.

Still, 12 years without a payment is a long time. I don’t know what state you live in, but in many that would put you over the statute of limitations threshold. You might consider checking the statute of limitations in your state. You can check it on this Bankrate map.

I checked with legal beagle and older cousin Fred Costello from Rhode Island and he suggested that if you are beyond the limit, you go to your attorney and have a letter sent saying the debt is uncollectible, you don’t intend to pay a penny and they must contact your attorney (not you) in the future. Under the Fair Debt Collection Act, they have to stop dealing with you and deal with your bulldog of an attorney. This should put a chill on any future demands.

If the statute of limitations does not apply, you could communicate with her. Have a civilized conversation and see if you can determine whether she has any plans to pay. After speaking with her, you will have a better idea of what you will need to do.

To help those readers who are facing divorce avoid your situation, please review the following tips for divorcing finances before things are finalized.

Tips for divorcing finances
  • Send a letter to joint creditors asking that the account be closed to any new activity. If you can, send this letter from both of you.
  • Pay off joint credit card debt in full from marital assets before division if there are sufficient assets to do so.
  • Transfer balances from joint accounts to individual accounts before the divorce is final if you don’t have enough assets to pay them in full.
  • If one of you has more resources it may be easier to agree to use that person’s funds to pay off joint debt incurred by an irresponsible spouse and perhaps obtain a trade-off in the other negotiations. The cost to do so may be less than the damage done to your credit rating or the attorney’s fees that may be incurred to solve a long forgotten issue later on.

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.