Divorcing a man and his $190,000 debt

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Dear Debt Adviser,
I want to divorce my husband as he has run up $190,000 in credit card debt in his business. I believe he may have used my name and Social Security number to obtain some of this credit. How can I find out if I am liable for any of this debt? He is keeping the business in the divorce and supposedly all the debt. I must make sure they don’t come after me if he doesn’t pay! Please help me!
— Cathy

Dear Cathy,
I am sorry to hear about your divorce. Unwinding credit obligations at the end of a marriage is never easy and when you have the amount of debt and mistrust that you describe, it will be even more difficult. The first thing I suggest is to check your credit reports and determine how much of the debt that your husband has incurred for his business is reflected in your name. While you are at it, if your state allows, I’d put a freeze on your credit file as well to prevent any new accounts from appearing.

Next, have your attorney ask the judge to require that your husband transfer any balances on the cards that are business related, and for which you are jointly or solely financially responsible, onto cards or loans in his name only. This should be included in the divorce judgment, if it isn’t finished by the time the marriage is dissolved.

As your lawyer knows, a divorce decree that states one person is responsible for a debt does not keep creditors from coming after the other party if his or her name is on the agreement. If you live in a community property state, this may be even more complicated, but your lawyer should be able to help you negotiate the best arrangement for your protection.

Should your husband be unwilling or unable to move the balances to cards or loans in his name only, you may have legal recourse for the fraudulent opening of  credit card accounts using your name and Social Security number without your consent. This will be sure to complicate your life further, so be sure you listen to your attorney’s advice before proceeding. My experience is that the court’s solutions to problems are rarely as satisfactory as you might wish.

If you want to stay away from the legal track, consider negotiating, as part of the divorce settlement, enough assets as collateral to cover your part of the debt liability should your husband not pay. You could always include a stipulation that once the debt is paid the assets would be redistributed however the two of you believe is equitable.

Before you sign your divorce decree, make sure that you have protected yourself as much as possible from your husband’s large business debt. While no divorce agreement may give you complete satisfaction, try to consider this the price of admission to a new life.

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.