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New Member
inthemoon
Posts: 5
Registered: ‎03-08-2010

debt in his name: will it stay that way?

My friend is currently going through a divorce and she is in desperate need of help.  A little background:  she inherited some money pre-marriage that she used for a down payment on a house.  She gets married. House #1 was sold at a great profit.  House #2 bought and also sold at a good profit and the monies were used to pay off husband's student loans.  They buy third house.  Husband wants all assets in his name (as he is thinking this is good for him for future divorce and to control her) and puts third house mortgage in his name as well as both cars.  I think she is fortunate in the sense that her husband insisted that the cars and mortgage all be in only his name.  They are badly in debt.  The house with the HELOC is worth less than they owe - or should I say less than he owes.  The cars are also being paid on.  She has a lot of credit card debt in her name only, and according to her, a bad credit score.  Right now she is living in an apartment with the kids, has one of the cars and the husband is still in the house with the other vehicle.  She has a job but makes about half what he makes.  Ideally, she'd like to get a less expensive car instead instead of assuming the loan on the car she is using.  Right now, she is relying on her husband to pay the car payments and insurance.  He gets the mail and the bills at the house so she has no control or authority over them.  She lives in fear of having someone repossess the car out from under her or of him dropping the insurance.  She is working with the CCC's on a payment plan.  He can currently pay the bills but will be unable to if she is awarded custody and the child support her lawyer thinks she will be entitled to.  Here are the questions:

1)  What would you do about getting another car?  She seems to feel she will not have a good enough credit score for a loan. I don't know what her score is.

2)  Can she just give the car back and move on?  Is it possible for him to stop paying the insurance on the car?

3)  Will all of the debt for the house and cars stay with him?   She really just wants custody of the kids and child support.  That's it. 

4)  Is there any way that she could be forced to take on any of the debt that's in his name? 

Valued Contributor
Jazzzy
Posts: 2,678
Registered: ‎07-29-2009

Re: debt in his name: will it stay that way?

Hi, and welcome to the forums.


inthemoon wrote:

 

1)  What would you do about getting another car? She seems to feel she will not have a good enough credit score for a loan. I don't know what her score is. She needs to start building/rebuilding her credit. She needs to reduce her cc debt and start saving up a down payment. If she doesn't know how to go about repairing her credit, she needs to start reading in these forums. It's hard work, but it's worth it. She maybe didn't need credit before, but...if she intends to have these kids...she needs to step up to the plate and start working on her credit.

 

2)  Can she just give the car back and move on?  Yes...if it truly is just in his name. How does she know this? Has she pulled and studied her reports to know which debts are and aren't in her name? How does she KNOW that she's not on these loans?

 

Is it possible for him to stop paying the insurance on the car? Sure...at the drop of a hat.

 

3)  Will all of the debt for the house and cars stay with him?   She really just wants custody of the kids and child support.  That's it. 

4)  Is there any way that she could be forced to take on any of the debt that's in his name? These two questions go together. A judge could give her the responsibility, for example, of making the payments on the car she intends to keep. That can be done in the divorce decree. However, the lender likely won't care. If his name is on the loan, it is unlikely they will come after her. She would be in contempt of court for not paying, but my understanding is that judges very seldom go after the person who was supposed to pay. On the other hand, the debt could remain with him. The judge could order him to pay it. If he doesn't pay, likely nothing would happen to him either.


Your friend needs to get her mind around this credit thing. She can't operate with her head in the sand. She needs to start rebuilding, and the time is now...not after the divorce. It is VERY difficult to muster your way through life with rotten credit. It can be done, but it's not fun. And, it's the kids who will suffer.

Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

Re: debt in his name: will it stay that way?

Is she in a Community Property State? Laws vary tremendously by state.

 

If the actual net worth of the married couple is negative, that could get complicated. She could get stuck with half the total debt. She also might get reimbursement for the money that she brought in to the marriage.

 

Sounds like she needs to talk to an attorney. If she has much of the CC debt in her name, the kids most of the time and makes substantially less, the temporary orders of the court would likely be for him to pay the payment and insurance of the car she was driving at separation.

 

Since the debt is in his name, the creditors will likely be working only with him, just as her CC companies are working only with her.

New Member
inthemoon
Posts: 5
Registered: ‎03-08-2010

Re: debt in his name: will it stay that way?

Thanks so much for the advice.  I found these forums for her and I hope she is using them for credit rebuilding as well!  I know I have learned a tremendous amount! 

 

She knows the titles for everything are in his name because she paid all of the bills before the split and he INSISTED that was the case..  She is on some kind of credit card payment plan that is supposed to get her APRs reduced so she is working on those at least.  I told her to get on here and figure out what to do to rebuild credit.  Her biggest concern now was the car.  She is trying to work amicably with the husband so she feels she should take over payments expecially if she can't get credit.  Once he starts paying her something for child support, I think she will be able to get rid of the CC debt but will then have to rebuild her credit.  Thanks again!

New Member
inthemoon
Posts: 5
Registered: ‎03-08-2010

Re: debt in his name: will it stay that way?

She is in not in a community property state.  She has talked to an attorney but doesn't seem to think that all of the financial details regarding the first house and his student loans are pertinent information.  I don't see how that wouldn't matter.  It looks that he is about ready to pay some child support due to pressure from his government employer.  Thanks for pointing out many other things to consider.
Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009

Re: debt in his name: will it stay that way?


inthemoon wrote:

My friend is currently going through a divorce and she is in desperate need of help.  A little background:  she inherited some money pre-marriage that she used for a down payment on a house.  She gets married. House #1 was sold at a great profit.  House #2 bought and also sold at a good profit and the monies were used to pay off husband's student loans.  They buy third house.  Husband wants all assets in his name (as he is thinking this is good for him for future divorce and to control her) and puts third house mortgage in his name as well as both cars.  I think she is fortunate in the sense that her husband insisted that the cars and mortgage all be in only his name.  They are badly in debt.  The house with the HELOC is worth less than they owe - or should I say less than he owes.  The cars are also being paid on.  She has a lot of credit card debt in her name only, and according to her, a bad credit score.  Right now she is living in an apartment with the kids, has one of the cars and the husband is still in the house with the other vehicle.  She has a job but makes about half what he makes.  Ideally, she'd like to get a less expensive car instead instead of assuming the loan on the car she is using.  Right now, she is relying on her husband to pay the car payments and insurance.  He gets the mail and the bills at the house so she has no control or authority over them.  She lives in fear of having someone repossess the car out from under her or of him dropping the insurance.  She is working with the CCC's on a payment plan.  He can currently pay the bills but will be unable to if she is awarded custody and the child support her lawyer thinks she will be entitled to.  Here are the questions:

1)  What would you do about getting another car?  She seems to feel she will not have a good enough credit score for a loan. I don't know what her score is.

2)  Can she just give the car back and move on?  Is it possible for him to stop paying the insurance on the car?

3)  Will all of the debt for the house and cars stay with him?   She really just wants custody of the kids and child support.  That's it. 

4)  Is there any way that she could be forced to take on any of the debt that's in his name? 


 

2.  If she is not in a community property state and there is no separation agreement or divorce decree that stipulates she is responsible for the auto, she probablyy can abandon it and move on.  Yes, he can drop the auto insurance at will. 

 

3.  If the debt is listed in his name only and they are not in a community property state, the creditors will probably go after only him.  That does not mean she escapes liability if things sour with the creditor(s). 

 

4.  Yes.  If the court enters a decree that assigns debt to her, she can be forced one way or another to assume the debt.  Granted creditors will take action against the spouse in whose name the original credit agreement was entered, but she can still be held liable in one (or more) of several ways.  First of all, she can be held in contempt of court.  Courts are sometimes reluctant to hold one in contempt, but the court's patience is not at all unlimited.  Also, the other spouse can file a civil action against her and obtain a judgment against her -- very, very easily if he has a divorce decree stating she is liable for certain debts.

 

 

IAALBNYL
Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009

Re: debt in his name: will it stay that way?


inthemoon wrote:
She is in not in a community property state.  She has talked to an attorney but doesn't seem to think that all of the financial details regarding the first house and his student loans are pertinent information.  I don't see how that wouldn't matter.  It looks that he is about ready to pay some child support due to pressure from his government employer.  Thanks for pointing out many other things to consider.

Although not in a community property state, even though she inherited money prior to marriage, she used the money to help purchase a home which became the marital residence.  Generally this property is the result of commingled assets and if -- and it's a big if -- the money she used as a downpayment is relevant, you'd need to hire an accounting firm to be able to account for every cent that each of the individuals paid for the house & upkeep.  It is exceptionally difficult and expensive to try and separate commingled funds. 

 

It is good that he is going to pay child support.  It may be important to note that unless there is a valid child support order in effect, unless he is a military member, even a US government employer cannot force him to pay child support. 

IAALBNYL
New Member
inthemoon
Posts: 5
Registered: ‎03-08-2010

Re: debt in his name: will it stay that way?

He is in the military.  Pressure is being applied by them.  She avoided going to them at first because she did not want him to get into trouble.  She finally had to as she just could not pay for childcare without help. 
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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007

Re: debt in his name: will it stay that way?


inthemoon wrote:

Thanks so much for the advice.  I found these forums for her and I hope she is using them for credit rebuilding as well!  I know I have learned a tremendous amount! 

 

She knows the titles for everything are in his name because she paid all of the bills before the split and he INSISTED that was the case..  She is on some kind of credit card payment plan that is supposed to get her APRs reduced so she is working on those at least.  I told her to get on here and figure out what to do to rebuild credit.  Her biggest concern now was the car.  She is trying to work amicably with the husband so she feels she should take over payments expecially if she can't get credit.  Once he starts paying her something for child support, I think she will be able to get rid of the CC debt but will then have to rebuild her credit.  Thanks again!


She needs to pull her credit reports anyway, checking every single account listed, and printing them out and saving them in case something pops on one day, and she needs to go eyeball the titles. I bought a car two years ago, wrote a check for it out of my personal checking account, financed it a month later with an auto loan from PenFed in my name only, and just found out that it is (now was) titled in both our names. The good ole boys at the dealer did this for reasons unknown, and it just didn't register on me at the time. I wound up having to buy two sets of plates, because I discovered this when I had to buy my yearly sticker and saw that he was on it. It took so long for PenFed to send the copy of the finance papers that the clerk needed that I bought a sticker for the car under both our names, and then turned around and bought a new plate and new sticker once we got it solely in my name. My bad; that's what I got for not jumping on this earlier when I was supposed to.

 

There are all sorts of little surprises like this that are discovered in the course of going separate ways. Most of us assume that we know how everything is titled and registered, and we're often wrong.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009

Re: debt in his name: will it stay that way?


inthemoon wrote:
He is in the military.  Pressure is being applied by them.  She avoided going to them at first because she did not want him to get into trouble.  She finally had to as she just could not pay for childcare without help. 

 

That's good.

 

His unit commander can order him to support his dependants, but only in an amount equal to or less than what his basic allowance for quarters is.  Once there is a child support order, then the amount can be higher.

IAALBNYL

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