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Ex's ID theft thwarts new couple's finances

She agreed to pay off the debt, but it's still showing up on his credit

By

To Her Credit
To Her Credit, Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets.
Ask Sally a question, or read her previous answers in the To Her Credit archive

Question Dear To Her Credit,
My husband was married before. When he and his ex-wife were still married, she took his Social Security number and got a credit card (without him knowing about it). Then she stopped paying on it.

When they got divorced, the divorce papers said that it's her debt, and she agreed to pay it off.

Because the card is under his name and Social Security number, it's causing problems for us trying to buy a house. Is there any way that we can get it off of his credit history?  
-- Kim

Answer

Dear Kim,
Opening a credit card in another person's name without their knowledge and authorization is a crime -- even when that other person is a spouse. It's a form of identity theft. Your husband's ex should have been prosecuted for her actions.

Your husband may have thought that getting her to admit the debt is hers, and putting that in the divorce papers, was enough to take care of the problem. Unfortunately, that's not true. Creditors are not interested in the contents of divorce papers. They have nothing to do with it. A creditor has a contract with a borrower or borrowers, and nothing agreed to between spouses in divorce court can change that.

The best thing your husband can do, if he hasn't done so already, is to report this identity theft to the police. This establishes that he did not open the account. Contact the attorney general and police department in your state. He needs a police report to prove he is not liable for this debt.

Your husband can send a copy of the police report, along with a letter of explanation, to the credit card company. He should tell them that he is not responsible for the account because it was opened fraudulently, without his knowledge or consent.

He should also send letters of explanation to the credit bureaus.

Going forward, your husband should make sure his ex doesn't open more accounts in his name. Identity thieves often strike more than once. He should check his credit reports on a regular basis. He might even want to put a freeze on his credit and alert one of the major credit bureaus (Equifax, Experian or TransUnion), so they put a fraud alert on his name. He only needs to alert one agency -- it will alert the other two.

Just one debt like this can mess up your husband's credit sufficiently to keep you both from moving forward with your financial goals. If the amount of the debt is significant, and you cannot resolve the issue yourself, seek qualified legal advice in your state.

See related: Divorce doesn't dissolve credit card contracts, 7 big post-divorce money mistakes

Meet CreditCards.com's reader Q&A experts
Vexed by a personal finance problem? CreditCards.com's Q&A experts answer questions from readers every weekday. Ask a question, or click on any expert to see their previous answers.
Gary Foreman, New Frugal You columnist Gary Foreman,
"New Frugal You"
Sally Herigstad, To Her Credit columnist Sally Herigstad,
"To Her Credit"
Tony Mecia, Cashing In columnist Tony Mecia,
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Barry Paperno, Speaking of Credit columnist Barry Paperno,
"Speaking of Credit"
Elaine Pofeldt, Your Business Credit columnist Elaine Pofeldt,
"Your Business Credit"
Erica Sandberg, Opening Credits columnist Erica Sandberg,
"Opening Credits"

Published: January 24, 2014



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