Protect Yourself from Future Liability on Credit Accounts After Divorce or Separation
If you do not close credit accounts associated with your name, or remove yourself as a responsible party, you may be liable to the lender for future credit extended on an account. This is true even if a divorce decree distributes the credit account to your spouse. Therefore, we recommend that you do several things:
1. Obtain a credit report in your name and social security number
Under the Fair and Accurate Credit Transactions Act (FACT Act) consumers can request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. To obtain a credit report online, visit www.annualcreditreport.com. They process requests for free credit reports, which are technically referred to as "credit file disclosures." This credit report will allow you to see all credit accounts associated with your name.
2. Send a letter
Send a letter to every creditor listed on your credit report to whom you do not wish to be liable for possible future credit. Send it by certified mail and first class mail and keep a copy with your records. The point is to close accounts for which you may be liable in the future because your name is associated with the account. If the lender will not close the account - and this is sometimes the case with joint accounts or accounts with existing balances - your letter should have the legal affect of terminating the contract between you and the lender for future credit.
3. Debts Remaining from the Marriage
Please note that you will remain liable to creditors for any remaining debts incurred during marriage until they are paid in full, even if you close the account and even if the divorce decree awards the debt to your former spouse. If your former spouse fails to pay, the creditor may try to collect from you and would have the right to do so. If you were forced to pay the debt, you would have a right to seek reimbursement from your former spouse if your divorce decree had a "hold harmless" provision - and most do. However, realistically, if your former spouse does not pay a creditor, the former spouse will probably also fail to reimburse you.