Marital debt a never ending story?

[jfullert]

I will have been divorced for 7 years this coming July.  We had substantial debt which I have almost paid off the debt assigned to me in the decree.  The ex on the other hand only makes minimum payments.  The down side is all of the debt was in both our names.  Where my debt is almost payed off.  She has 12K plus on a credit card and 19K on a home equity loan in both of our names.

My credit score was finally getting up into the 700s when today I get an alert that it dropped 60 plus points.  I have been making the payments on the 12K credit card because she said she couldn't make them.  Apparently she is now late on the home equity loan against the house she was awarded by the court.  She refinanced the house several years ago so my name isn't on the first.

I also pay her alimony and child support.

Is there anything I can do with the creditors that will help my situation?  The courts won't force her to sell the house because kids live with her part time.

Thanks

[JM-AM]

Sorry to say this but welcome to the world of reality...

Divorce decree for financial debts on who is to pay what is useless as most honest lawyers should warn you.

If your name is on the debt then you are just as responsible for the loan. If they do not pay it hurts you also, if they go bankrupt the lenders and creditors will come after you. While most people do not know this until it happens to them, its actually a shame that there is limited recourse to the situation.

Best thing you can do is get a free consultation with an Attorney, and discuss your options. What I can see will become a problem is you have been helping her pay the debts which isnt a bad thing, but will look like you are able to afford the debt which seems you are, and just have you keep paying it. But once again you need an Attorney to advise you as laws change all the time.

I really hope you have some recourse in your situation.

[StartingOver10]

Just to add a little to the above well put post, you have an additional risk associated with the HELOC if your ex decides to pull funds from it or just stops paying entirely. 

One of the avenues you could consider is to pay off the HELOC, make sure the account is closed and the HELOC satisfaction is recorded (mortgage lien satisfaction) and then have your ex pay you for the debt.  This would eliminate any further dings on your credit or even a potential f/c notation on your credit (120 days on a HELOC is a technical f/c notation).  This is a very tough situation. Protecting yourself and your credit is much more difficult when someone else has control of a payment (your ex). If you eliminate the control by paying the debt - make sure then you can go back after your ex to collect what you were in essence forced to pay to protect your credit.

[drkaje]

The court has no power/authority to modify contracts, why do they even bother with unenforceable degrees?

OP is essentially held hostage by DEW forever unless income magically improves to the point where he can make her free of any marital debt.

It stinks but anyone considering marriage/re-marriage should think long and hard about if they can financially survive what happens more than 50% of the time. Nobody get it twisted 'cause I didn't type "Don't do it", LOL!

[GregB]

A loan is a contract between a lender and the borrower(s). A Divorce is a legal action between two spouses.

The Judgement of Dissolution, or divorce decree or whatever, is a new agreement between the two spouses and the state. It cannot control the lender since the lender is not a party to it. It can let you go back to court if either spouse violates the terms. His recourse is through the Family Law system or perhaps Civil Court.

If he can get divorced and only have it trash his life for 6 years, he is doing well. It isn't unusual to see legal issues after 15 years.

Possible remedy might be to get the court to let him pay the HELOC directly and deduct it from support. Depending on the court, he might be able to just start doing that without causing him a problem.

In order for a divorce to be fair, you need to have both spouses be reasonable. That rarely happens.

Edited to change "spoused" to "spouses" in last line.

[drkaje]

Many are never allowed to move on (financially or in any other context) from divorce.

[bettercreditguy1]

Was there a re finance or new loan to get you off of the title to the house? One assumes as you posted that you are still joint title owners of the house.

[GregB]

The spouse that does not keep the house is normally removed from the TITILE, but not from the LOAN.

Particularly in the more liberal states, there is too much ability of the less responsible spouse to do too much damage to the more responsible spouse and they are usually not in a position to qualify for one spouse to keep the house. Also, no judges in my area would hold up a divorce or be willing to add court orders to refinance the house. More conservative states my be more practical about this.

[bettercreditguy1]

Greg, you are correct. There is NO ADVANTAGE to the lending agency to REMOVE a signer on the loan. It softens or lessens their ability to collect funds owed on the financial note. However, one can re-finance, thus getting the non occupying spouse/significant other removed from the obligation. This is only possible if there is enough equity and enough monies for correct dti with the occupying spouse. If there is not, then I would press for a SALE or liquidation to get out from under the obligation. As we know, it is one big HAMMER hanging over your head as you have no control and only are a silent participant in these often crazy situations when the other persons decides to be silly. High stress indead. (p.s. It was the best advice my attorney gave me, ie to get removed  from the situation before the final decree was approved and I am sure glad I listened). It was stressfull enough meeting the remaining debts, child support, etc. after finality.

[Weimmutti]

You stated this:

  home equity loan against the house she was awarded by the court.  She refinanced the house several years ago so my name isn't on the first.

I thought If you refinanced your house. The house was placed in your name and new loan and conditions assumed.  In my home state, The home equity loan against the house would have been paid to allow this change of ownership.

If this is so, how would you be required to assume the debt and how could it effect your credit score?