We’re seeing a lot of cases where, some time after a final divorce decree, one former spouse defaults on a loan and the other spouse has his or her credit damaged.
These cases are not necessarily easy, and can be very tough if, indeed, the innocent spouse co-signed for the loan or was otherwise responsible for it at the time the loan was taken out.
If you find yourself in this situation, you must include in your divorce papers a warranty or representation that the spouse that takes over the loan must take any and all necessary steps to become the sole obligor on the loan, thereby relieving you of your obligation to repay it. As stated, if you at one point in time obligated yourself, you might actually get stuck with the loan and you would have to go back through your divorce attorney to get it straightened out.
If this has happened to you, first things first: send a copy of the divorce settlement agreement showing that you’re no longer on the loan (per the divorce; the bank or lender may state that you ARE still on the loan) to the creditor and to the three bureaus. This might effect a credit correction. But no guarantees are there to be made on this situation.
Thanks for reading.