Does divorce relieve you from financial responsibility of a co-signed debt?

credit-responsibility-in-divorceQuestion: I cosigned on a new car for my ex-husband (he was my husband at the time) because he had no credit and I had great credit 4 years ago. We got divorced and he didn’t pay on the car and it got repossessed. The car was auctioned off and the remaining balance was showing as a write off.

He claimed he paid it, I didn’t believe him but I filed a dispute with the credit bureaus and wow was I surprised, he paid it. So they updated the status to paid in full. I want to know if there is any way that i can get this removed from my credit since in our divorce decree he accepted the debt for the car.

The car company says they don’t care because I co signed I signed a contract with them and I am still legally responsible regardless of the divorce decree. I just want this off my report, it’s be repossessed, yes, but it’s also now completely paid off.

Would I have a chance of getting this removed if I dispute it with the credit company and send a copy of my divorce papers or would it be a waste of time?

Answer: The reason a bank or lender requires a co-signor for consumers with less than perfect credit is to protect themselves in case of default. As a co-signer, you are contractually obligated and legally responsible for the debt.

Unfortunately a divorce decree does not change your contractual obligation. The lender maintains their rights to collect from the co-signer and report negative credit unless prevented by law.

Joint and co-signed debt should have been addressed by your attorney during the divorce. Specifically, you could have requested your husband refinance the debt in his name alone; or, requested the lender to relieve you as co-signer as part of the divorce settlement of martial assets and debts.

I am not an attorney so I can only assume that unless the judge in your divorce made an order specifically affecting your obligations as a co-signor, the lender has no duty to remove the negative information from your credit report.

Sending your divorce documents to the lender probably will not make a difference but you never know until you try. Perhaps a goodwill letter requesting deletion will make a difference especially if you can show how the negative listing is adversely affecting you.

You may actually have a decent chance of getting it removed since the debt is paid. If you are able to come to an agreement, get it in writing from the creditor. Good luck to you.

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