Divorce and Loan Consolidation

READER QUESTION

I am divorcing, and my soon-to-be-ex-spouse consolidated our joint credit card debt. Do I have liability?

Read full question
Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

A divorce decree does not trump the contract terms in a loan, whether that loan be a credit card, mortgage, or vehicle loan or lease. You and your spouse signed the credit card contract, and a divorce does not rewrite that contract. You may ask, "But doesn't the divorce decree trump the loan contract?" No, it does not. Unless a court actually enters into an agreement to change its terms, an existing agreement remains in effect regardless of a subsequent divorce decree. The divorce is a new agreement between the spouses regarding their financial responsibilities, but it is not binding on third parties.

Your spouse may have done you a huge favor by converting joint debt to debt in your spouse's name alone. Check your credit score and ensure that those credit cards are indicated as closed or are no longer listed under your name. Go to AnnualCreditReport.com and get a no-cost, no-gimmick copy of your credit report.

Though you did not sign any recent contract, your former spouse may have included your name in the contract. Learn what you can about the consolidation loan, and your potential liability.

Consult with a New York attorney that handles debt issues and divorce to confirm you are no longer liable for the debts in question. If you have liability, learn the extent of your liability.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

No Comments


Thanks for your feedback!
 
Thank you for subscribing!