Am I responsible for my ex-husband’s or ex-wife’s debts?

Ex-spouse Debts :
Whether you are responsible for your ex-husband’s or ex-wife’s debts depends on the circumstances surrounding the issue, your state law and perhaps most importantly, who signed the credit contract. For instance, if your name is still on the credit contract then, even though you are divorced, you are still responsible for the debt regardless of what the divorce decree states. It’s important to understand that a divorce decree only spells out who is supposed to pay the debt.  It does NOT legally change who is responsible for the debt.

When couples divorce, they usually agree on who pays what. For example, a car loan is in both names and the divorce agreement states that the ex-wife keeps the car and is responsible for making the payments. Several months later, when the ex-wife defaults on the car loan, collectors start calling her and her ex-husband. The ex-husband claims that the debt is not his because his ex-wife got the car and the payment in the divorce. The collector says it is the ex-husband’s responsibility and will pursue legal action if he does not pay up. This collector is correct and will probably win in court!

After divorcing, couples would be wise to have joint credit contracts revised so that only the name of the person responsible for the debt is on the contract. Be advised that creditors are reluctant to do this, especially after a divorce, because experience tells them the chances of the loan becoming overdue is high and so having two people responsible for the debt is better because if one ex-spouse defaults, the lender can still pursue the other ex-spouse.

Another question I’m asked quite often is, Why wasn’t I notified when the debt went delinquent?” The answer is because the creditor probably only has one address; typically the address before the divorce. If you moved out, then it’s a good bet you are not getting the payment and statement notices either. Another scenario might be where the person responsible for paying the debt moved out of the primary address on the credit contract AND changed the mailing address with the creditor thus the payment statement is no longer going to the primary address. Whatever the case, creditors are not responsible for finding people to send payment notices too. Sending a notice to the last known address is about all they’ll do and even that can be a courtesy depending on the credit disclosure agreement.

Your best protection is to make sure your creditors know both ex-spouse’s addresses on joint credit accounts. Also, make sure the lender knows you both want to be notified before an account becomes delinquent. Doing this may prevent the account from being sent to collections and being reported as a negative on your credit reports.

What happens when an ex-spouse goes bankrupt?

Just as in the previous paragraph, if there were no joint debts, you have nothing to worry about and your credit will not be affected. However, if there were any joint debts with your name still on the contract, then you can be held responsible for the entire debt. However, the bankruptcy laws are very complicated. Consult a bankruptcy attorney to be sure of your status!

Can collectors call my current spouse and discuss my debts?

I answer email from spouses who want to know if a collector violated the FDCPA by discussing unpaid debts with the other spouse. No violation occurred because the FDCPA specifically allows this.

Debt collectors can legally discuss details of your debts with your spouse. The same rule applies to minors (less than 18 years old), to a guardian, executor, and parents.

Let’s say you just got married and suddenly a debt collector calls about an unpaid debt from three years ago that you had forgotten about. You’re not home so the collection agent proceeds to discuss the details of your debt with your spouse – this does not violate the FDCPA.

Typical Scenario

You are a married male who owes several thousand dollars on a credit card that is in your name only and the payment is way overdue. One day a collector calls your home phone, identifies himself, asks if you’re home and, when learning that you are not home, asks the adult female who answered the phone if she is your spouse. Unless she identifies herself as someone other than your spouse,, the collector can discuss your debt with her.

If the female identifies herself as someone other than your spouse (something she should do immediately) the collector must cease all communication about your debt. Discussing your personal information concerning the debt violates the FDCPA and opens the collector up to a lawsuit.