Reasons To Consolidate

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Life After Bankruptcy

You are responsible for Spousal Debt

Despite what your lawyer is telling you, a divorce decree will not eliminate your financial responsibility to pay off debts incurred jointly during your marriage. When you both signed on the dotted line, your spouse and you jointly agreed to make good on that line of credit. If one spouse cannot pay, the other is equally financially liable to pay it. Bottom line, their debt has now become your problem. The only time a court has the power to overturn a contract between two individuals is then the contract has been deemed fraudulent.

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After the divorce, where does the credit problem end?

You may be surprised to find that you are divorced, and are getting nailed on your credit report for loan or credit line defaults that you are not defaulting on. Unfortunately if that mortgage or line of credit was taken out before the divorce, your spouse not paying the bill means YOU are not paying the bill. This may come as a surprise, especially when you believe you have given up the house in the divorce settlement. The credit reporting companies will not remove these items from your report; they are yours to keep and hopefully clean up. To put it simply, if you signed the contract together, you pay the debt, or suffer the credit hit, together- divorce decree or not.

Does a divorce decree protect me from items not assigned to me?

Once again the answer is no. The creditors are simply not involved and rarely if ever consulted during the divorce process. Your divorce decree may clearly assign certain payments, lines of credits, mortgages, etc. to your spouse, however if they default on these credit lines, you will get pegged by the credit companies too. Yes it sounds unfair, but the credit companies want their money, and your divorce and the details entailed within are of little consequence to them collecting their money. You may find yourself, especially without proper protection, paying both with your checkbook and your credit score years after your divorce has been settled.

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