For now this is just going to be a quick post, but later we will get into the topic of divorce and how to properly divide your marital debt. There is a sort of urgency when I am writing this because of a recent email that was sent by one of our visitors. I am not sure how common this situation is, but it happened to me and I have recently found out that it has happened to a few other people as well.
What I am referring to is when your wife, or a vengeful soon to be ex wife, finds a way to take out a credit card solely in your name. It may be more difficult to do now because of the all the issues that credit card companies have gone through recently, but I am sure that it is still happening. All it requires is some lack of respect by your significant other and some personal information that she can easily get a hold of (really, how hard would it be to for her to get a hold of your social security number,birthday, etc.)
This is how it works and why it can come back to bite YOU in the ass…
Your wife fills out some credit card application online (or one of those they send to you in the mail), and has the information sent to a different location (ie. her work, a friends house, etc). She is issued the credit card and has some male friend, who is probably jealous of you and has a crush on your wife, activate it for her over the phone. Now she has a working credit card with your name all over it, and an expendable income. The kicker is that during the spending spree she pays the minimum payments each month to keep it under wraps for a while longer. Think about it… How much would it suck if she used that same credit card to hire the most expensive divorce lawyer in town.
My question to you… When was the last time that you saw your credit report? When you got it was she involved in any way? Are you 100% sure that there were no missing pages? There is a specific reason that I ask you this…
Let’s say that she pulled this off early in the marriage and has built up one hell of a debt and making only minimal payments. You happen to find out at some point, but you are still responsible for 50% of it… Why, you ask? Because it will be very hard to prove to the judge that you were completely oblivious to it. After all, it is your credit and you are a responsible adult who always knows what’s on it. At this point, its your word against you wife’s that you didn’t know about it, and the judge will still order to divide that debt 99% of the time. You can pursue a different route, like trying to get her on identity theft, but that is a completely different legal issue and the judge in your divorce case won’t even consider that without a charge and/or conviction. This is exactly what happened to me… Yes, I wasn’t keeping track of my credit report for a long time and it cost me in the end. Trust me I won’t make that mistake again!
Scenario #2… You are actually being proactive and got a copy of your credit report in the last month or so. However; your wife could have just as easily opened up a credit card account after you obtained your report and is now able to use it just as freely because you are too confident about knowing all the information that is on your credit report. You check your report 6 months down the road and found out then, what she did, but now the divorce is final. It’s too late to even make her responsible for 50% of the debt. Meanwhile the credit card company is calling you to get payment 3 or 4 times a day, because she stopped paying anything on it. You explain the situation, but again without a charge and/or conviction of identity theft, they could care less. Your name is on the account and you are legally still responsible. The end result: Suck it up or go through another lengthy legal battle. Meanwhile, your credit rating falls through the floor.
With my ordeal, I have found the easiest way to have prevented the problem is to report the issue as soon as it happened. But of course it was too late for me and rather than spend even more time in court, I reluctantly agreed to pay on the $7000 credit card account. I am still trying to repair my credit from this more than a year later!
So what is the moral of this story… Always know what is going on inside your credit report! At least until this divorce issue is over and you feel “confident” that you are in the clear. But all of us here highly recommend that you take it one step farther and enroll in a credit monitoring service, like the one at CreditReport.com, so that even if someone, aka your ex-wife, tries something then you will know about it immediately. Hell, you will even be notified when the credit card company simply looks at you credit report to see if “you” qualify. It should always raise a red flag when some company pulls up your credit report and you don’t even know who they are. If that happens, report it immediately, before something even worse happens.
It really doesn’t matter if you use CreditReport.com or not. There are several different monitoring services available. But make sure that you use somebody who will look out for you while you have to focus on other, more pertinent issues at home. The cheap expense of a monitoring service is tiny compared to what it could cost if anything like this happens to you. For example, Creditreport.com has a free trial and then only costs $14.95 a month; That equals to 39 years of credit monitoring to add up to the $7000 I have to pay.
So please be careful and remember “Hope for the Best, but Prepare for the Worst!”. And in case you were wondering… Yes, I used (and still do) CreditReport.com to keep an eye on my credit.
{ 2 comments… read them below or add one }
I do believe that I am the visitor that Chris is talking about in this post. Sent in an e-mail wondering what my options were after I just found out the my wife (been separated for over 3 months) had not 1, but 2 credit cards out in my name and I didn’t know about them in over a year. I still love my wife so I am not going to press any charges, but I am still going to try and gather the evidence necessary to try and convince the judge that she is 100% liable for this debt. I know that he said that this wasn’t likely to happen, but I have to try. I can’t take on another $13,000 in debt without some sort of fight. I know that this may sound bad, but I was glad to hear that I wasn’t the only person that this has happened to. I will being watching my credit report a lot more closely in the future…. Thanks for you help Chris, I will let you know how it goes.
An even better and less expensive option is to freeze your credit file with each of the three major credit reporting agencies. No one can pull a credit report on you without you authorizing the credit agency to give it out, and you can then unfreeze it for a specific period of time. I think they\’re allowed to charge you a small fee for doing this ($5 maybe?). I do this just as a general protection against identity theft. It\’s more foolproof and far less expensive than a monitoring service.