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business credit cardDivorcing a man and his $190,000 business credit card debt
Answer: I am sorry to hear about your divorce. Unwinding credit obligations at the end of a marriage is never easy, and when you have the amount of debt and mistrust that you describe, it will be even more difficult. The first thing I suggest is to check your credit reports and determine how much of the debt that your husband has incurred for his business is reflected in your name. And if your state allows, I'd put a freeze on your credit file as well to prevent any new accounts from appearing. Next, have your attorney ask the judge to require that your husband transfer any balances on the cards that are business-related, and for which you are jointly or solely financially responsible, onto cards or loans in his name only. This should be included in the divorce judgment, if it isn't finished by the time the marriage is dissolved. As your lawyer knows, a divorce decree that states one person is responsible for a debt does not keep creditors from coming after the other party if his or her name is on the agreement. If you live in a community-property state, this may be even more complicated, but your lawyer should be able to help you negotiate the best arrangement for your protection. Should your husband be unwilling or unable to move the balances to cards or loans in his name only, you may have legal recourse for the fraudulent opening of credit card accounts using your name and Social Security number without your consent. This will be sure to complicate your life further, so be sure you listen to your attorney's advice before proceeding. My experience is that the court's solutions to problems are rarely as satisfactory as you might wish. If you want to stay away from the legal track, consider negotiating, as part of the divorce settlement, enough assets as collateral to cover your part of the debt liability should your husband not pay. You always could include a stipulation that once the debt is paid, the assets would be redistributed however the two of you believe is equitable. Before you sign your divorce decree, make sure that you have protected yourself as much as possible from your husband's large business debt. While no divorce agreement may give you complete satisfaction, try to consider this the price of admission to a new life. Steve Bucci is president of Money Management International Financial Education Foundation. Visit www.moneymanagement.org for additional debt advice. The Debt Adviser is a weekly feature of bankrate.com. |
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