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About Regan Shinski
Expertise
I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit credit reporting.

Experience
Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA University of Minnesota

You are here: Experts > Business > Corporate Law > Collections Law > credit

Collections Law - credit

Expert: Regan Shinski - 11/11/2009

Question
QUESTION: I discovered my ex husband took out several credit cards in my name solely without my knowledge (while we were married) and charged thousands of dollars of debt without my knowledge.   I lived in Indiana at the time of my marriage. I have been told that he did not break any laws. Is that correct?
According to the divorce decree he is responsible for particular debts that are in my name only. He has not been making the payments. They are turning the debts over to an attorney because they state they will not honor the divorce decree. How can they refuse to honor a legal document from a superior court? This is also adversely affecting my credit history. I have provided the creditors with my ex husbands home address, cell phone #, employer name and address. They tell me I am solely responsible and cannot contact him. What are my legal rights?
Also my ex husband forged my name on a tax return for back taxes that I was not aware of until I found the tax documents after he left the marriage. How can forgery be legal within marriage?
I would appreciate any guidance you could provide me.
Thank you.

ANSWER: Hi Karen:

I don't live in Indiana but I am not aware of any law in the country where fraud and forgery are legal. The only POSSIBLE exception is with a legally signed power of attorney but even then you don't sign the name, you only have power to exercise certain legal functions. If the cards were taken out without your knowledge, you need to go to the police. File a police report, press charges. At the very least, they can inform you if there is some obscure state law in Indiana I am not aware of. You should then contact the credit card companies/collection agencies and inform them of the fraud. You need to be able to show them a police report, affidavit of forgery, criminal charges or other documents of substance instead of just giving them his name and contact information and saying he did this.

Until they remove your liability from the charges through some type of fraud, you are the account holder. They have no legal obligation to honor divorce decree documents. They did not extend credit to him, they extended it to you and their contract is with you. Sadly, on this issue it sounds like they are handling it properly and legally.

Your options are then to sue your husband and collect from him. This is where your divorce decree comes into play. You show the court the decree, proof that he has not made the required payments, and show how you were damaged and you should win the case. Damages can include the hard costs of payments you made that he was supposed to make, court and attorney costs, damaged credit, and the ramifications of having the damaged credit. You need proof through your credit reports and credit score to win monetary damages on that issue. You would get a judgement against him and have to collect it. Unless the fraud issue takes hold as described above, you would still be legally liable for the cards in your name even if you win the judgement against your ex.

On the issue of tax documents, you have to decide two things: Are the taxes filed correctly and do you want to pursue. If they are not filed correctly, I would contact the IRS and advise them of the situation in its entirety. If you want to pursue against your husband, you contact law enforcement and the IRS and press criminal charges.

I'm sorry you are in this awful situation. Good luck going forward, you do have some options.

Regan
mbscompany@aim.com

---------- FOLLOW-UP ----------

QUESTION: Please explain why Kathleen Crabtee informed someone that their divorce decree is a legally binding document and if the courts release them for their obligation, the creditors have no right to pursue them. They could also demand they remove any adverse credit reporting as it relates to these debts by contacting each credit bureau and file a complaint. This was a response to a question asked by G. Anderson and is on the Home Page of this website.

ANSWER: Well, I do not see her question but we have a different menu to answer questions than you. Regardless, I'm not sure what to say. I have seen what I wrote happen countless times. My company has been hired numerous times to repair the credit from people in the same situation. If you think about it logically from the creditor's standpoint, why would a divorce stop your obligation? It's simple contracts law. You have a credit contract with the creditor. It's between two parties: you and them. How can an agreement between you and your husband change the agreement between you and the creditor? It can't.

Look at it this way: If you hire a painter to paint your house, YOU sign the contract with ABC Painting. Later, YOU sign an agreement with your husband that he will pay ABC Painting. You think ABC Painting can't come after you? They don't even know anything about your husband, just like the credit card company doesn't know anything about your husband nor do they have a contract with him. Honestly, I wish it was so for you but I don't think it is.

The only exceptions I can think of - and you explore them all or I may not be understanding your situation completely - are fraud, if your name is not on the account, charges made after closing the account, charges made after the divorce, bankruptcy, or some state law I am not aware of.

I have copied several quotes and included links to other webpages to support this answer. Some refer to joint accounts as that is more common but I think you are in even worse shape because the account is only in your name. I hope they help. This is a complicated issue. You may have mitigating circumstances or local law that supports your position, so I advise you hire an attorney to get sound legal advice.

QUOTE:   "Credit card companies aren't bound by divorce decrees..."

LINK: http://www.creditcards.com/credit-card-news/help/dividing-credit-card-debt-divor...

QUOTE: "Just because your divorce decree said that one spouse was responsible for this debt and the other spouse responsible for that one, as far as your creditors are concerned you’re both responsible."

LINK: http://www.creditscorequick.com/blog/category/divorce

QUOTE: "Credit card companies do not care who the purchases were intended for nor who benefited from them. When you established credit in your name, regardless of the reasons you did so, you are solely responsible for any purchases and therefore all liabilities. Credit card companies will not allow you to "switch" the account holder from one account holder to another."

http://www.womansdivorce.com/credit-card-debt-in-divorce.html

QUOTE:   "Remember: Creditors are not obligated to respect the terms of your divorce judgment... When you divorce, you should make sure that you either close any joint credit cards, or that at a minimum you have your name removed from any joint accounts which will continue to be used by your spouse. This will not end your liability for debts incurred up to that point, but should end your responsibility for any new debts incurred on those accounts by your spouse."

http://www.expertlaw.com/library/family_law/credit-cards.html

QUOTE:   "The credit card company is counting on you and whomever else is on the account to pay the monthly balance until it is paid off. It’s a obligation that they usually enforce regardless of changing martial status , and often regardless of who’s “supposed” to pay according to a divorce decree. In short, they will be expecting you to pay the monthly minimum, forever, until it is paid off. Even if your ex- is supposed to."

LINK:   http://www.divorce360.com/divorce-articles/debt-and-credit/debt/divorce-planning...

QUOTE:   "...but the bottom line is, if you are the only name on the credit card, then even if he is ordered to pay you, the credit card company still holds you fully responsible."

LINK:   http://en.allexperts.com/q/Divorce-Issues-1626/2009/3/credit-card-debt-responsib...

QUOTE:   "Whether you become single, married, divorced, widowed, a life partner or a life enemy, it makes no difference to the creditor... Many divorcing couples make the MISTAKE of believing that their divorce decrees stating one spouse is responsible for debt A and the other spouse is responsible for debt B relieves them of financial responsibility for the debt not assigned to them"

LINK:   http://www.bankrate.com/finance/debt/divorce-doesn-t-end-your-debt-with-ex.aspx

QUOTE:   "...couple are divorcing and have joint credit cards with American Express and Visa. The husband agrees to take on the American Express payments while the wife agrees to pay the Visa bill. After the divorce, things don't go well for the husband and he defaults on his payments to American Express. American Express goes after the wife for payment. She says how can that be? Well, if she was a joint account holder on the card at the time the debt was accumulated, then she is jointly liable for those debts. She probably has an agreement from her husband to indemnify her (standard in a divorce), but that indemnification agreement means nothing to the creditor. American Express must be paid and the wife will be jointly responsible

LINK:   http://www.mississippifamilylawblog.com/2009/04/dividing_debts_in_a_mississipp_1...

---------- FOLLOW-UP ----------

QUESTION: I understand all of your points of view but now that raises two new questions:

In the first place, shouldn't this lady's attorney, Karen, have known the law and known that this decree would not be enforced after the fact? This is clearly a case of legal malpractice in this instance.

Second, why would the credit company not be held in contempt of court because if a judge is making a court order in a decree that a husband is responsible for a debt, rather than the wife, the decree is a legal and binding court order not only to both parties involved but all so named in the decree? If I were a judge, I would be livid. What they say goes... that is why it is called a COURT ORDER! Sounds like someone is in contempt here to me.

She should have either been better advised before the divorce or the credit company should be preapring for a jail cell next to the husband.

Answer
Again, this is one of the more complicated areas of divorce law and this is not the best forum to exchange legal advice that can be deemed 100% accurate. No documents or case history are being formally reviewed and there can be governing state-by-state issues.

I do not know what was discussed or advised by their attorney, so I'm going to comment on it too much. It's really irrelevant to the position as it sits today. Remember, even in a worst case scenario, she has a solid case to sue the ex and get a judgement since the divorce decree is basically an agreement between the spouses. So the decree CAN be enforced after the fact by her suing the ex.

Regarding the other issue, this is a civil matter, not criminal. Contempt of court charges are not likely. Why not say the ex is in contempt of a court order for not paying the bill? You can't.

This is also deemed more of a negotiated settlement, not some revolutionary court ruling. It happens everyday. Was the credit card company present? If they agreed to this settlement, that is a totally different situation but the questioner did not mention that in her question. It's highly unlikely - think about even from a common sense standpoint - that a court can wipe out a contract without one party being allowed to defend themselves in the court proceeding. You say it's a court order but it's likely a court order ONLY between the TWO spousal parties, not the credit card company.

Regardless, I don't think I can explain my position on the matter any further. I believe it is sound and supported with other opinions, sites, and history that I have personally seen and dealt with. I have also explained where there could be exceptions. I have advised her to seek additional and formal legal counsel rather than in this limited forum with no document review. If she feels she has a valid legal standing, she needs to sue the credit card company directly and the issue will be adjudicated one way or another. There is even a chance the credit card company will choose to settle or drop their claim before court so it may not be a bad tactic in any case.

Good luck. I really do hope it out works in her favor.

Regan

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