Unsecured Debt dispute with ex-spouse
A recent article on Bankrate.com, "Help! I'm a victim of ID theft -- by my wife", highlighted an interesting scenario. A reader under the name "shocked", posed the following question to the Debt Adviser: Dear Debt Adviser,
I just checked my credit report and found my wife opened an account using my name and information. I have never used this account. I didn't apply for this credit. Now the account is delinquent. In your opinion, what is the best way to go about fixing my credit? Author, Steve Buscemi, gave a very detailed answer to the reader in regards to his marriage.
This question made me think about the implications regarding a person going through a bankruptcy or thinking about divorce. I sought answers from Florida Bankruptcy Attorney Audra Simovitch and Palm Beach County Divorce Attorney, Joseph R. Fields.
Florida Bankruptcy Attorney, Audra Simovitch, suggested the following:
Prevention is the key. Everyone should check up on their credit history yearly. Take advantage of the free annual credit report offered by credit agencies to check the activity on their credit. The consumer service, Credit lock, is another useful tool that can prevent something like this this from occurring in the future.
As far as the debt is concerned, unless the husband can prove that his wife forged his signature in the credit card application it may be a losing costly battle to sue her or the credit card company. The husband has the option to declare bankruptcy if this is was a consideration for other reasons. In a chapter 7, the debt would be considered unsecured and maybe totally dischargeable depending on his financial means. In a Chapter 13 the debt may have to be paid off under a payment plan but at a reduced value depending on his financial means.
Palm Beach County Divorce Attorney, Joseph R. Fields adding the following commentary regarding couples in the process of divorce:
This happens all the time. Several clients have experienced this problem. Almost all of which occurred before I became their lawyer! A few years ago I started coaching my client's early on in the divorce on how to avoid this problem. I instruct all clients to obtain a credit report to ensure this has not happened. At the beginning of each case, a report or reports are pulled.
Personally, I favor myfico.com as the source for doing this. This company will issue a report that combines the big three credit bureaus data into one document. Obviously, people who have not used their free annual credit report can go to each of the three credit bureaus and do a report separately. It's important to do a combined or each bureau, as sometimes there are entries on one that are not on all.
As the trial or final mediation approaches, I also suggest an updated credit report to make sure nothing happened during the pendency of the case. If something shows up that the clients don’t know about, we have the discovery tools of the divorce case to make further inquiry and can bring it up at the trial. If the discovery happens after the trial or divorce judgment is entered, there is a much more difficult and expensive remedy available. By knowing what is on your credit reports now, you can avoid nasty surprises in the future.
Read more: Hubby unmasks wife's secret credit affair