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Tigz

cc account held in his/her name. Divorce Question

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Note: Not really a credit related question....more of a question on wording in a divorce.
 

OK legal eagles (and even those that have stayed at a Holiday Inn Express)  

When a divorce decree says something to the effect of "The Husband shall be responsible for and pay to the satisfaction of each creditor the indebtedness owed on any credit card accounts held in his name."   (same provision for the wife).  

To me, this means any credit card that he (or she) is the primary card holder of and includes debts made from a AU.  In other words, I would be responsible for any credit cards I took out under my name and my credit history, and I would be responsible for any debts for people I put on the card as an authorized user.  

Someone else argued that if an AU has their name on a card, that they will be responsible for the debt made on that card even if they are not a co-owner of the account.  To which I called BS.

So what says the collective wisdom of the gen discussion board?  

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As a recent stayer at a Holiday Inn Express, I agree with @Tigz. The primary cardholder is responsible for all activity made by the AU. Even if that AU is the former spouse. Its in the T&C's for AU's on most revolving accounts.

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On 12/8/2019 at 9:29 AM, Tigz said:

Note: Not really a credit related question....more of a question on wording in a divorce.
 

OK legal eagles (and even those that have stayed at a Holiday Inn Express)  

When a divorce decree says something to the effect of "The Husband shall be responsible for and pay to the satisfaction of each creditor the indebtedness owed on any credit card accounts held in his name."   (same provision for the wife).  

To me, this means any credit card that he (or she) is the primary card holder of and includes debts made from a AU.  In other words, I would be responsible for any credit cards I took out under my name and my credit history, and I would be responsible for any debts for people I put on the card as an authorized user.  

Someone else argued that if an AU has their name on a card, that they will be responsible for the debt made on that card even if they are not a co-owner of the account.  To which I called BS.

So what says the collective wisdom of the gen discussion board?  

 

First of all, it's important to note that no creditor is bound by a divorce court decision.  

 

As far as a creditor is concerned, the account owner is responsible for everything.  That's not to say the stain of default cannot appear on the AU's credit reports, however -- at least temporarily.

 

I believe the divorce decree states as you indicated.  The account owner is SOL and has to pay for any debt run up by the AU.  That is not to say, however, that he / she can't go back to the judge and ask for a modification after explaining the circumstances.  Whether or not the judge will make the modification is another story.  

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Pot O nailed the most important thing that many overlook (counsel and litigants alike).  Except AND unless the card issuers were afforded notice and an opportunity to appear, nothing in the way of that court order is going to preclude one of the parties from walking the debt.  The contempt citation is often cheaper than paying the debt, and in most instances the screwed-over party does not even KNOW to go to court and seek a contempt finding. 

 

The simple reality is that a party to a divorce that has debts in their name needs to be prepared to pay them, regardless of the language in the Final Decree of Divorce. 

 

For accounts where one party is an AU, the best guidance is to get thine name offeth of the cards/accounts ASAP!  As also aptly noted, even without the contractual liability in most instances, the derogatory reporting would apply to BOTH/ALL cardholders on the account.  And while most of the four major bureaus will promptly delete an AU account through the dispute process, the damage will already have been done in some instances...good luck re-opening an account closed because of the fiscal irresponsibility of the primary account holder...

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Lesson Learned for the friend of Tigz ....

 

For anyone else who might be suspecting of domestic relations problems - Keep your powder dry and be ready to hit the kill switch on any combined finances. I keep a list of AU accounts that DW has access to on a list that I could access from my PC or phone. Its tough when a domestic partner decides to part ways but the time for crying is later as right now its time for financial defense, as you don't want to pay the consequences for the next seven years.

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9 hours ago, centex said:

 

...

 

And while most of the four major bureaus will promptly delete an AU account through the dispute process, the damage will already have been done in some instances...good luck re-opening an account closed because of the fiscal irresponsibility of the primary account holder...


Yup.  
 

Even though the CRAs delete the AU account from the AU's credit report, that may not end the headache.  Although AmEx has eliminated financial liability for AUs, there are still financial institutions that do hold them liable.  Pay close attention to the ToS on USAA credit cards, for example.  Then there is Navy.  They don't give a rat's arse about ToS.  Hell, they'd probably try to hold anybody that lives within a three block radius of your house liable.

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