Creditors don’t care about your divorce decree

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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.