This is a question we received via email that we thought would be helpful to many others:
“I was divorced from my husband last year. At that time, the court ordered him to make payments on our truck since it was his work vehicle and he was the primary user. That was about the last I’d heard anything about that situation until recently. I recevied a collections notice from the bank that issued the auto loan. There is a $4,000 balance and apparently I’m being held responsible for paying it off. This makes very little sense being as the court made my ex responsible for the truck. Is this something I can dispute?”
Can you see why this is a good question? Many people fall under the asumption that they are no longer responsible for a debt if the court passes responsiblity to an ex-spouse. While the court’s judgment is valid for it’s own cause–that is, ensuring a fair seperation and division of finanical obligations–unfortunately, the court order does not negate the original contracts with your creditors. Any joint accounts will be treated as such by creditors, with or without a court judgment.
Unfortunately, you will be held responsible for any debt you incurred together and this is something that would probably be pointless to dispute.
To avoid situations like this, it’s a general rule of thumb to sell all joint assets before the divorce, and use the capitol to pay off joint debts. Another option is to transfer ownership of property (refinacing your home or vehicle in just one party’s name, for example) before the divorce so that those particular obligations are no longer shared.
Dealing with credit and debt problems after divorce is common, and can cause high levels of unwanted stress and complication. The important thing to remembr during such times is to keep your cool and don’t do anything irrational, such as walking away from property you still partially own. This is a great way to ruin your credit. There are ways to disassociate yourself with these kinds of financial reponsibilities–but if you don’t take care of them before the divorce is final, you may just find yourself in trouble.
As always, you can contact one of our credit experts if you have any more questions about credit repair or credit and divorce.
