Expert: Michael Brotherton - 12/15/2008

Question
My fiancee's ex-wife has had serious issues with credit in the past.  During the marriage, they had purchased an appliance at a large chain store on the in-store credit card.  Soon after, they paid off the account, the cards were destroyed, and my fiancee called them to close the account.

Last Christmas, his ex-wife remembered the account, reactivated it (even though his name was on it and they were now divorced), had a new card issued, and used it to buy Christmas presents, running up over $550 on the card.  He found out about the card, immediately called to close the account, and confronted her.  She promised to pay the bill.  In July, she went delinquent on the $10 bill, and it is now in collections.

He has been told by the credit card company that the divorce decree means nothing, and they are jointly responsible for the debt.  All receipts are signed by her, and she reactivated the account without his knowledge.  

The account was not even listed in the divorce decree because it was paid off and closed.

Could you recommend any way to deal with this?  She has also recently stopped paying a joint car loan, which also showed up on his credit report while he was trying to buy a car for his 16-year-old son.  She has destroyed his ability to get a loan, as he has been recovering from the damage she did during the marriage.

Answer
He may file an affidavit of fraud with the bank and deny all claims against him. He may then send a copy of the affidavit to the collections dept. and advise them to cease and desist all collection against hi and remove his contact information.

Send the letter by certified mail, return receipt requested. This should stop any collection activity against him. If it does not and they persist, file a complaint with the state attorney general and the federal trade commission. He might also threaten prosecution against the ex. or actually file it and a civil suit to force her to pay.

The car loan is a different issue and his options are very limited. He may file suit to take possession of the vehicle and try to sell it. He does not want them to repo the car or he will have to pay the deficiency. His ability to take the car depends on whether his name is on title or not. In this case the judge will have to decide whether to allow him to take possession or not. Then he can run an ad in the paper and submit any reasonable offer to the bank as "settlement in full". If they accept the offer he will walk away free and clear. If not he will owe the difference.

Don't let her off the hook. Force the issue or he will end up paying and paying and paying....and it will destroy his credit. You would hope that once you are divorced that is the end of it... but it rarely is. You still have to deal with issues like this.. and then some.