Divorced find 'ex' can mark spot for hidden credit report woes


NEW YORK -- A reader from Greenwood, S.C., says she got an awful shock when she checked her credit report. She was divorced eight years ago. But debts belonging to her "ex" have turned up on her personal record and she can't get rid of them.

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 BancOhio (now National City Bank). The record showed that her monthly payments were way behind.

The debt, however, wasn't hers. It belonged entirely to her ex. 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. But some credit-card issuers turned her down. The problem got worse when her ex stopped paying entirely. National City charged off the debt as uncollectible, listing the stain on her record and his.

There are lessons here for every separating spouse.

* Lesson One: Don'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.

* Lesson Two: To 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.

* Lesson Three: Never take the bank's word, over the phone, that a joint account is closed. After you've called the bank, follow up with a letter and keep a copy.

* Lesson Four: Even 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.

* Lesson Five: There'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 his new card.

* Lesson Six: After 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 ex finds he can't pay the credit-card debt, the lender can come after you.

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.

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