Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, October 30, 1995 TAG: 9510300059
SECTION: MONEY PAGE: 8 EDITION: METRO
SOURCE: JANE BRYANT QUINN WASHINGTON POST WRITERS GROUP
DATELINE: NEW YORK LENGTH: Medium
She discovered the problem when she and her new husband refinanced their mortgage. Her credit history was spotless except for a $2,000 credit card debt she apparently owed to an Ohio bank. The record showed that her monthly payments were way behind.
The debt, however, wasn't hers. It belonged entirely to her former husband. When they separated, she had called the bank and asked that her name be taken off the credit card. The bank agreed, as she recalls, and the statements quit coming to her address.
As it turned out, however, the bank sent her ex the statements but left the card in their joint names. So, the bills remained on her account.
Her mortgage company understood and granted the loan she was asking for. But some credit card issuers turned her down. The problem got worse when her former husband stopped paying entirely. National City charged off the debt as uncollectible, listing the stain on her record as well as his.
This reader chose anonymity, lest the bank pursue her for bills she shouldn't have to pay. But she wrote to ask if there's a way to clean up the mess.
I found a couple of things she can do to clear her report, neither of them simple or cheap. But whatever she decides, there are lessons here for every separating spouse.
nDon't walk out of a marriage with an open credit line - be it a credit card, debit card, overdraft checking or a home-equity line of credit. If you applied jointly for that line, each of you remains liable, even for debts contracted after you divorce. It doesn't matter to the lender who runs up the bills. Either or both of you are expected to pay it off.
nTo stop any liability for future debts, there's just one thing to tell the bank: Close the account. That cancels the card or the credit line. Neither you nor your ex can use it again.
nNever take the bank's word, over the phone, that a joint account is closed. Some telephone reps will follow through but others don't. After you've called the bank, follow up with a letter and keep a copy. Then, if your name is accidentally left on the credit card account, you can prove the bank was wrong. When the error is theirs, banks will clear customers' credit reports.
nEven when you cancel a card, the lender can hold you liable for any debt that's on it already. Maybe your ex contracted the bills, but it's your credit just as much as his.
nThere's only one way to shift old debt out of your name. Your ex can formally take it over. For example, he might cancel the old card and move the debt to a new card he has taken out.
nAfter the divorce, get a copy of your credit report. That will show you which cards remain in your name.
Normally, the divorce lawyers split up the debts of the marriage as well as the assets, says New York matrimonial attorney Robert Arenstein. You might agree to pay the mortgage; your ex might agree to pay off all the credit cards.
But the lenders aren't party to your separation agreement. If your former spouse finds he or she can't pay the credit card debt, the lender can come after you. The bank didn't dun the reader in Greenwood, S.C., but that was probably because she had vanished into a new married name. But the credit bureau found her easily enough.
If an unfair blot appears on your record, put a statement in all your credit reports, explaining what happened. The three major credit bureaus are Equifax, 800-685-1111; Trans Union, 316-636-6100; TRW, 800-422-4879. Credit card issuers may ignore your explanation. But mortgage and auto lenders usually can be reasoned with.
Beyond that, you can:
Sue your former spouse. If a court finds your ex responsible, the bank will clear your credit, even though the debt hasn't been repaid.
Try to make a deal with the bank. It might clear your credit if you agree to pay what's owed.
by CNB