Ex-husband responsible to pay my Capital One account in divorce decree but is not and they offered to settle.
I was divorced in 2008. My ex husband had incurred a large amount of debt, some of which he used a large home equity loan to pay off, and still had an additional large loan with Capital One ($24,000) that was in my name (as his credit was poor for a long time).
I was in the dark as to the amount and scope of these loans, as he was using the money to finance a second family. At our divorce, he was ordered to pay the Capital One personal loan. He went several months without paying, and now he pays about half of the originally agreed-upon monthly amount.
Capital One sends me letters that the account is 60, 90, back to 60, then 90, etc. days late, and each time the ex responds that he is paying as much as he can and they are accepting his payment and he is doing the best he can, yada, yada. In the meantime, my credit is trashed.
I have called Capital One and they have offered to settle for 1/2 of the original amount, and I would have to try to get blood from the proverbial turnip. I know that the credit card companies do not acknowledge divorce decrees, but do the courts see these as reasonable defenses? It would be filed in the same small town with the same judge that granted my divorce, and shortly dead-docketed a domestic violence case against him (long, sorted story...). Your help is appreciated.
Is the divorce decree outlining his responsibility to pay a good defense for a possible lawsuit?
—KAP
You have recognized that Capital One is unfortunately not going to let you off the hook even though your divorce decree made your ex responsible for the payments on that account. If CapOne takes you to court as the person contractually obligated to pay, your defense (even in front of the same judge you had during the divorce proceedings) that the ex was to pay off the debt will not likely meet with success as CapOne is trying to enforce a contract with you.
The settlement offer of 50% from Capital One is reasonable. Is there a way for you to come up with the funds and later take your ex to task for the amount you paid?
Is there a way that you and your ex can pool available funds to meet the negotiated amount in order to put this behind you?
You can certainly drag your ex back into court over the matter, but to what end?
I would recommend you connect with your divorce attorney and explore your options for holding your ex accountable, but to resolve the debt with Capital One in the best, and most affordable way you can, in order to prevent collections on the account escalating from here.
Anyone dealing with a similar set of circumstances is welcome to post int he comments below for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I’m pretty sure it has been longer than 180 days, she has not provided me very good information. I believe it is still with GE Capital, sorry I previously stated USBank. I have not heard anything to the contrary or from a debt collector. Also, we both live in MN.
Should I go ahead and call them and try to settle? I have been told though that settling a debt amount for less is a bad mark on credit reports additional to any marks for late payments, is that true? Since I was not the one actually late on payments though how do I negotiate with them to remove those marks? I suppose I am partly responsible for it getting this late but I feel since they did not directly contact me for payment I should not be accountable for late charges etc. I did not have the resources to settle until I recently sold my house anyway but now I guess I am ready to get this and my poor decision behind me.
Thanks again.
If GE Capital is already more than 180 days overdue, the account has been dropped into the collection pipeline. Once an account passes 6 months of nonpayment, and enters into later stages of collection, the credit damage is what it is. Whether you offer to pay an account this late off entirely, or settle if for less than the balance owed, is generally not going to change any credit scoring attributes. The zero balance now owed that accompanies paying a negotiated settlement, or paying off the entire bill, is what you are after. And both are accomplished equally no matter which way you go of the two. In other words, no, not true. Not with collection accounts that reach this stage of collection.
You will not be negotiating to remove the late pays. You are only negotiating the final pay off amount. The law requires them to report only current and accurate info, such as the balance now being zero. Give it upto 60 days for them to do that. If they do not, post an update and lets go from there.
I wish I had better feedback, but you and your credit score are left on the hook after a divorce with the current credit reporting and division of debt and property in the US. If you do jam this out (the settlement), and maintain best practices for your personal credit reports onward, this will be a speed bump in 12 to 24 months.
Hello Michael,
I am hoping you can help me. I was divorced in 2009. It was amicable and I did much of the paperwork myself. Unfortunately at the time there seemed no other option but to have my ex take responsibility for a retail credit debt in both of our names for furniture we had purchased. It was not a large sum, I think the balance at the time of divorce was about $2,800. It was one of those that was 0% interest if paid off by a certain date. She missed that date and accrued interest, then recently has lost her job and fallen behind on payments and is now in process of filing for bankruptcy. I see it is effecting my credit already because when I applied for a retail credit offer I was only given a limited amount, otherwise I have excellent credit. As I eluded to this debt was assigned to her per our divorce decree, which I now understand means very little or nothing to the issuing credit card company, USbank. I have been advised that I could sue her for the money and that civil awards are not dismissed by bankruptcy but I believe she would just retaliate by having our child support situation reevaluated. I always had the attitude that if I have to pay a little more to help her keep herself and our son in a good home when he is with her it is worth it, but I shouldn’t have to pay her bills for her and about 90% of the costs of raising our son when she was supposed to pay half. Given most of what I have read I am reasonably sure that I am going to have to pay for this, I have been trying to get myself to call them and find out my options but I keep freezing up in fear of them coming after me. I don’t want to make the wrong move. I was advised by a debt counselor provided through my job to call them and ask to have my name removed but my ex said she had tried to do that right from the start and they refused.
This is already effecting my credit and will apparently continue to do so until I act, but can I actually pay it off and have it removed from my reports? Is it possible for me to settle with them for the original debt before she started incurring all the late fees etc.? If it goes into collections are they going to come after me? And then once in collections is the damage to my credit irrevocable? What happens when my ex gets her bankruptcy finalized? I don’t know which level she is filing, she doesn’t seem to know but indicated it is the kind that removes all debts.
Thanks,
Jeff
Jeff – You are not likely to pay it off and get it removed. But how long has the account been unpaid? Is USbank still who is collecting?
It is possible to settle and only pay the balance prior to the account being late (without all the late fees and added interest). It is not a protocol or anything like that though. Just a target amount you would aim for in negotiating the debt. You could possibly settle from much less than that.
You will be at risk of collections coming after you until the account is resolved, or for as long is legally allowable in your state (every state will limit how long you can be sued for a particular debt like this).
The damage to your credit may be irrevocable now, but if we are only talking about 30 day lates, but not yet 180 days late, you can bounce back from something like that – credit score wise – pretty quickly (if all other credit reporting concerns are healthy).
When your ex has her chapter 7 discharged, she is off the hook for this, and her other debts. She starts over with a low to no debt level, but a bankruptcy on her credit report for the next 10 years (her kind, the chapter 7, reports for 10 years, while chapter 13 only reports for 7).
Hello
I’m a Realtor and I currently have client in escrow who has a judgement on his record. It shows that it’s a FIA debt but escrow has called the law firms where the judgement were made and they both have gone out of business.
We’ve reached out via email and telephone and have not received any response. We can not close on this house with out a write off or a pay off request. Help! Who can get us one or the other.
Thank you
Gena – You can call in and talk with Steve, one of the specialists who has had success getting things tracked down with FIA – 800-939-8357