Wife's Joint Loan w' Ex

[gmk]

My wife has a line of credit that is a joint account with her ex spouse. She has been the only user of it for the past 10+ years or so. There's about $3000 owed on it and she has been paying $70/mo. The monthly statements/bills are in his name. It does show up on my wife's credit report.

We don't want him to be affected (credit wise, obligations to pay, etc.) by our Ch7 BK. Due to this, this is the only creditor bill we have been paying. By the time we file it will not aggregate to over $280.

Any advice on how to proceed on this. Is this something that requires affirmation?

[justbroke]

I would not reaffirm that loan at all. List it as unsecured debt and let it discharge. Your wife can continue to pay on it, but that line of credit will be closed. Nothing prevents you from paying your discharged debt. I don't know if this was in some sort of divorce decree or dissolution agreement, but I'll never understand why anyone would keep a joint account open after divorce.

[gmk]

Thanks for the input justbroke.

Does the discharge negatively affect the Ex's credit even though we continue to pay on it?

When we finally file, the creditor will get an automatic stay. Does that mean they will start trying to collect from the ex?

Throughout the process (filing, 341, etc) do we just continue to pay on it?

Sorry if the questions seem simplistic, we're new at this.

[justbroke]

Does the discharge negatively affect the Ex's credit even though we continue to pay on it?

No, it shouldn't.

When we finally file, the creditor will get an automatic stay. Does that mean they will start trying to collect from the ex?

Yes and no. The Automatic Stay applies to your "ex" as well. This is known as the Co-Debtor stay. Once you receive your discharge, then the automatic stay as to both of you will go away. Then your ex is responsible for the debt. You will have no "personal" responsibility for the debt after discharge.

Throughout the process (filing, 341, etc) do we just continue to pay on it?

Yes if you want to and can afford to. They may not accept the payments during the automatic stay. I just don't know on that part. You may have to "save" your payments until the stay is lifted.

[OhioFiler]

Thanks for the input justbroke.

Does the discharge negatively affect the Ex's credit even though we continue to pay on it?

When we finally file, the creditor will get an automatic stay. Does that mean they will start trying to collect from the ex?

Throughout the process (filing, 341, etc) do we just continue to pay on it?

Sorry if the questions seem simplistic, we're new at this.

Keep paying it as normal and make sure the ex knows you intend to do so.

[OhioFiler]

I would not reaffirm that loan at all. List it as unsecured debt and let it discharge. Your wife can continue to pay on it, but that line of credit will be closed. Nothing prevents you from paying your discharged debt. I don't know if this was in some sort of divorce decree or dissolution agreement, but I'll never understand why anyone would keep a joint account open after divorce.

I made the mistake of allowing my ex-wife several years to refinance the mortgage on our once jointly owned home. I was unable to purchase a new home on my own several years later given I was liable for that debt as well. Eventually, she refinanced.

I also made the mistake of trusting her that the utilities had been transferred into her name. Only when the electric company came after me for a $1,000+ unpaid bill 8 years after the divorce did I find out she enjoyed using my name post-divorce. I forwarded my divorce papers to the utility company and they eventually let me off the hook.