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Question about previous marital debt in future marriages

Nymh's picture
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If you don't know the situation, BM is in a boatload of debt which she has been carrying since she was married to BF but not paying on. Now one of the creditors has seized her assets until the debt to them is paid. BF is scared that if we get married and there is a judgement that they seize his assets or put her debt on his credit report, it will also affect MY assets and credit report as well.

They were ordered in the divorce to split the marital debt 50/50 and they were to make all debts known to each other, which BM never did. BF has paid off all of his debts from the marriage but has no way to pay off the things that were in her name because she still will not disclose this information to him - she just wants him to "cut her a check for his half" which he will not do.

Does anyone have any experience or insight with this? Will her debt affect me through BF if we get married? And will they be able to seize my assets and/or put her debt on my credit report? I told BF that I thought that was ridiculous but he is adamant that he is right.

ColorMeGone2's picture

Divorce decrees are funny things. A judge can say that BM and DH must each pay half of the marital debt and so they must. If one of them doesn't pay his or her share, then the other can file contempt charges and the judge will make a ruling. However, none of this matters to creditors. A credit card company, bank or any other creditor is not a party to the divorce decree. They don't care what a judge has ordered, their contract is with the person they lent money to. If BF and BM load up their credit card with $10k in debt, then they are each responsible for paying $5k according to the court. BF can send in his five grand to the credit card company, but if BM does not, then the credit card company will still hold him equally responsible for the other five grand. There's no way out of that, except to pay it and then sue BM for contempt and see if you can get reimbursed through the court.

If these were joint accounts, then creditors will come after both parties on the account for repayment. They will report the debt to both of their credit reports. If they were individual accounts, then they can only come after the individual who opened the account. The only way his assets could be seized would be if he keeps his money in a joint bank account with her and/or they have joint assets, or if the credit was obtained in his name. The reason they went after BM's dad was because he either co-signed something for her or has a joint bank accout with her. If he co-signed, it means he has to pay it if she defaults or else he's in default, too.

As long as your BF does not keep his money in a joint bank account with her, does not have any assets in both their names (like cars, houses, land, etc.) and was not on these accounts with her, then the creditors cannot put her debt on his credit report or seize his assets to repay her debt. Now, if these are joint accounts and his name is on them, then he has to pay it, as far as the creditor is concerned. The creditor doesn't care that she is supposed to pay half. You'll have to get the courts to reimburse him for her half, if he ends up paying it all off. If his name is on these accounts, then definitely keep your money separate, because they can't seize his money without also seizing yours, if you share a bank account. The only way any of this would ever end up on YOUR credit report would be if you were joint on the account with them.

My DH and his ex-wife had bought a house together just before they separated. She got the house, naturally, and the judge decided not to make her sell or refinance because there wasn't yet enough equity in it. DH, however, did have to deed it over to her. He had no legal claim to the property, however, he could not get taken off the mortgage because, as the lender explained, their contract was with him, not with the judge who made the order. His ex-wife was late with the mortgage payments and slipped close to defaulting several times before she finally refinanced and got it in her name alone. But the damage was already done, unfortunately, and it did keep us from buying a house for several years. It sucked for him to know that his ex-wife and her new husband were living in a house that he was still contractually obligated to pay for, if they failed to make the payments.

I would go online and run his credit report with all three bureaus and see what's out there. That's the best way to find out if he's named on any accounts that he doesn't know about or if he's being reported for debt that's not his. You can file disputes online immediately. This will also tell him what their "joint" or "marital" debt is. I'm not 100% sure, but I would see if I could get some clarification from an attorney on what constitutes marital debt. It obviously includes joint debt, where they had joint accounts, but it may not include individual debt, which she incurred in her name only. Also, the credit reports will show the date that each account was open, so that should help in determining whether it's really marital debt or not.

♥ Georgia ♥

"Good men don't just happen. They have to be created by us women." (from ROSEANNE)

Nymh's picture

He and I both subscribe to myfico.com so we automatically know everything that is on our credit reports. As soon as he got divorced he went through and paid off everything that was on his credit report as debt. So as of right now, nothing that they have is joint debt at all, it's all her individual debt.

He's probably going to end up having to sue her for contempt because not only is she not paying off her half of the debt, but she's not giving him access to pay his half either. Instead, she's spent the past two years bitching that he's a deadbeat who never gives her any money (when in fact he's actually a couple hundred dollars ahead on child support). Luckily it is all in her name only, and if anyone else is on it, it's her parents. That way they can't go after BF, and therefore can't go after me!

*~So sayeth Nymh~*

ColorMeGone2's picture

I'm not sure this is even "marital" debt, to be honest with you. The legal definition of "marital debt" varies from state to state, but usually it applies to debt incurred for the joint benefit of the parties. If your BF did not receive any benefit from this debt, then it's not marital debt. It's more about why the debt was incurred than it is about the marital status of the person incurring the debt. If a married couple bought furniture for THEIR home on credit, then that would be marital debt, because the furniture was purchased for THEIR home and for THEIR mutual benefit. If a cheating, married man went out and bought his girlfriend that same furniture on credit and put it in their secret love nest, it would not be considered marital debt, because the wife did not benefit from it. (Well, maybe she will benefit, if she can prove adultery and win a nice little judgment for it, but that's a whole 'nother story!) Wink

♥ Georgia ♥

"Good men don't just happen. They have to be created by us women." (from ROSEANNE)

Nymh's picture

It would be really nice if they would subpoena all of her debt records and go through them all to determine which are really half his obligation and which are completely hers. I wonder if it's gotten to the point that a judge would be likely to do that since she's taken it so far and he's gone out of his way to try to help her for years but she won't cooperate.

It would be nice, but I'm not counting on it. If it was our usual judge, I could see that happening...but BM is forcing him to recuse himself from their cases because before he was a judge, he represented BF as his attorney. I think that will work to her disadvantage, however, because they're going to have to get a continuance on her case until they can get a special judge to hear it...they're going to court tomorrow but it's with the old judge. So all the fit that she threw before because of him just means she'll have to wait another 6 weeks to get a judgement on whether BF has to pay her more CS money!

*~So sayeth Nymh~*

hlao23's picture

I don't think you have to worry too, too much about your assets and credit score. My DH had defaulted on his student loans some years back and had some debt from medical bills so I was a little concerned about what might happen when we married. So far, the only thing that I've found that can happen is that, if we file our taxes together, the student loan will take the entire amount that we would get back. My credit is still excellent even though his will take some time to build back up.

We have kept most things seperate. We did not add his name to our home (I say "ours" but I came into the marriage with it) and I've taken out a second mortgage with no problem. He just isn't involved in that part of the finances.