USING SPOUSES INCOME

[Anonymous]

Thanks.  I never figured that out.  For example, I have 2 auto loans and in no circumstances can Toyoat come after my wife for the balance on them.  Now, I could go after her for it if a court ordered her to pay one as aprt of a divorce settlement, but credit wise, it would never hit her score.

[Anonymous]

If you're in a community property state, I think Toyota absolutely *can* come after your wife for your auto loans. I think that's the whole point of why both spouse's debts need to be considered even if income/credit is not. By virtue of marriage in a community property state, you are responsible for your spouse's debts (that are acquired during the marriage, in some community property states), regardless of whether your name is on those debts (but also have rights to all of your spouse's property, to keep things "fair").

[Anonymous]

I believe the point is that in a community property state, a judge can asign debts to the other partner in a split.  A creditor still has no actual legal recourse to sue or go after the one person for the other's debts.  If I got divorced,  (seeing how we have 2 cars and both loans are in my name) the judge would more than likely give one to my wife and one to me.  He would also assign the debt from the one to her as well.  Now, if she did not make the payments, I could go after her through the courts for the debts.  But, as far as Toyota is concerned, the debt is still mine.  The courts can not change the legal wording of the contract that I signed with Toyota even though he can, as part of the divorce settlement, assign that debt to my wife for payment. 

In other words, Toyota can not do anything but ruin my credit and try to take the car back if she doesn't pay.  I could then go after her through the legal system for failing to live up to her end of the divorce settlement.  I would still be on th hook for the bad debt on my credit score unless the creditor agreed to remove if after shown court docs and stuff.  That would be totally their choice.

[Anonymous]

I really don't think that's correct for *all* community property states (it may be for yours, as community property varies a bit from state to state). According to a 1-2 minute search on Google, several sites I found indicate that the debt is the legally responsibility of both spouses, regardless of who's name is on the debt. IANAL, by my interpretation is that in (at least some) community property states, marriage legally joins two people into one entity, and so a contract with one is a contract with both, so that both are jointly and severally responsible for the debt of either, regardless of whether they are specifically mentioned in a contract. A divorce judge's ruling is not necessary, and the creditor can go directly after the spouse even if not mentioned in the contract.

Some references:
http://www.franklindebtrelief.com/community-property.html
http://family-law.freeadvice.com/divorce_law/debt_incurred_marriage_divided.htm
http://en.allexperts.com/q/Collections-Law-912/husband-debt.htm
http://www.jsyohananlaw.com/PracticeAreas/Reimbursement-Issues.asp

[Anonymous]

It may be state to state.  I talked to a collections/debt attorney about this here in California as well as Toyota Financial when I found out about the whole non buying spouse clause in FHA.  They both said that a company can not come after the spouse for a debt that is not in the spouse's name no matter what the conditions.  That may be based upon Cali laws or some other info, I am not sure. 

[DallasLoanGuy]

It is a highly held misbelief that in all community property states, that you are responsible or your spouse's debt.

This is not the case.