Ask Stacy: Am I Responsible For My Ex’s Debts?

Here’s one more reason to discuss money early and often before and during your marriage. It’s also a reason why you might want to avoid getting hitched in “community property” states…

Hi Stacy,
After a divorce, my credit rating suffered. I was stuck with most of the credit cards my ex-wife ran expenses up on. I could not pay all of the bills (hers and mine). I talked to the creditors, they just said it was my responsibility, end of discussion. I did the best I could. The creditors I could no longer pay sold or charged off the debt. My credit rating went from very good to very poor. Now one of the companies that bought one of the debts has reported [it] on my credit report. I am down already, now I am getting kicked, too. My question is: Can a debt that has already been reported by the original creditor be reported again by a company that bought the debt? How can any of us get out of this bad credit situation if this starts happening? I would appreciate any advice on this matter.
Jerald.

Here’s your answer, Jerald!

Before we get to Jerald’s question – can a debt reported by one creditor be reported by another? – let’s talk about the first part of his note. Jerald says, “I talked to the creditors, they just said it was my responsibility, end of discussion.” Here’s my first advice: Don’t bother asking a creditor if a debt is your responsibility. Many creditors – particularly collection agencies – will always say a debt is your responsibility, even if they know it isn’t. Their job is collecting money, and they’ll collect it from you, your mom, your neighbor, your dog, or some stranger walking down the street.

Want to know whether you’re legally responsible for a debt? Ask a lawyer. Anyone else could either be lying to serve their own purposes or wrong.

Jerald typically can only be “stuck” with his ex-spouse’s debt in one of four situations:

  • He applied for the debts in question together with his ex. In other words, they’re joint account holders. In this case, the debts are as much his as they are hers, regardless of who actually used the plastic.
  • He cosigned or otherwise legally agreed to pay these debts if she didn’t.
  • He was divorced under the laws of a community property state: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
  • His divorce decree stated that he was responsible for his ex’s debts.

In most other situations, you’re not responsible for someone else’s debt. But you’ll need to prove that to collection agencies to get them off your back – and to credit reporting agencies to get the debt off your credit history. If you need a lawyer to get collection agencies off your back, check out Abused by a Collection Agency? Get a Free Lawyer. If you need a debt that isn’t yours removed from your credit history, see 3 Steps to Improve Your Credit History.

So the first thing Jerald should do is give a quick call to a lawyer and verify that he’s responsible for these debts. I’d suggest starting with the one representing him in the divorce.

Now let’s address his question…

Can a debt that has already been reported by the original creditor be reported again by a company that bought the debt?

Short answer: Yes. As I said in last week’s Ask Stacy column, when a creditor gives up and charges off a debt, they often sell the uncollected debt to a collection agency. The collection agency then begins attempting to collect the debt and as a result may report it to credit reporting agencies.

While this may make it seem as if the debt is being shown twice, it actually isn’t. When the original creditor gives up, they change the debt on your credit report from “open” to “charged off,” which tells anyone looking at your credit history that the account is closed. When your creditor sells that debt to a collection agency, however, it becomes “open” again, because it is: The money is now owed to them, and they’re trying to collect it.

If both you and your ex are legally responsible for the debt, they can report it in either or both of your names, because either or both of you owe it.

Bottom line? Be careful who you open credit with, always know what you’re responsible for, and if you see a divorce on the horizon, cancel any joint credit card or other loan accounts. Because if you signed the credit application, you’ll be responsible for the bill.

Got more money questions? Browse lots more Ask Stacy answers here.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Not Asking About This in the Hospital Can Cost You Thousands
Not Asking About This in the Hospital Can Cost You Thousands

Medicare recipients who fail to clarify their hospital status can pay a high price.

8 Amazon Picks Under $30 for Coffee Lovers
8 Amazon Picks Under $30 for Coffee Lovers

We’ve brewed up a list of amazing Amazon products that are sure to perk you up.

17 Home Maintenance Tasks That Save You Money
17 Home Maintenance Tasks That Save You Money

Here’s how to cut household costs and maintain your property’s value.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

7 Common Online Shopping Mistakes That Will Cost You
7 Common Online Shopping Mistakes That Will Cost You

How many of these costly online shopping missteps are you making without realizing it?

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

10 Cars You Are Most Likely to Keep for 15 Years
10 Cars You Are Most Likely to Keep for 15 Years

The cars that owners hold onto the longest have one thing in common, a new study shows.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

9 Things You Should Never Leave in a Car
9 Things You Should Never Leave in a Car

Thinking of leaving these possessions in a car? Prepare for unexpected consequences.

9 Mistakes People Make When Cleaning With Vinegar
9 Mistakes People Make When Cleaning With Vinegar

Cleaning with vinegar can save you a lot of money, but using it like this can cost you.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

10 Things Successful Retirees Do Differently
10 Things Successful Retirees Do Differently

These habits and characteristics can help put you on the track to success.

7 Costly Health Problems That Strike After Age 50
7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

29 Purchases That Can Save You Money Every Day
29 Purchases That Can Save You Money Every Day

Sometimes, you’ve got to spend to save.

7 Things I Never Buy at Costco
7 Things I Never Buy at Costco

A bulk buy isn’t always the best buy.

5 Tax Mistakes to Avoid in Retirement
5 Tax Mistakes to Avoid in Retirement

Even great savers can reduce their retirement income by making these mistakes.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.