How to divorce ex's debts - is bankruptcy the only way?

My sister got a divorce about a year ago, and is now in major credit trouble. Her ex is not making payments on the expensive truck she co-signed on before the divorce, and also on some credit card debts that they had in common. She's paid her share of the credit cards, and even some of the truck payments, although he is the one who has the truck. The divorce and the truck happened in Oregon. According to the divorce agreement, she could force him to sell the truck, or reposess it if he doesn't keep up on payments, but he's also not giving out an address where he could be reached to reposess the truck, nor any job address (if any). The truck is worth less than the balance of the loan, especially since his lack of payment has added more than $1000 to the loan balance lately, so she'd be forced to pay money in order to sell the truck. Oh, and of course he's also avoiding all child support payments.

The question here is - is bankruptcy the only way out of this? Is there any way to get the creditors to go after him (particularly on the truck), and to clean up the credit reports? According to the divorce settlement, these debts are his, but according to her lawyer, the debtors are not bound by that agreement. If it's relevant, although the divorce and truck loan occured in Oregon, she lives in California now.

Any help would be very much appreciated. Thanks.

[vrzirn]

I hope butterflygirlie reads this post.

[I AM ALWAYS LIABLE]

My response:

As I was reading, I was thinking the exact, same, thing.

[url]http://forum.freeadvice.com/showthread.php?threadid=86267[/url]

IAAL

The question here is - is bankruptcy the only way out of this?

In my personal opinion, personal bankruptcy is seldom the way out of one's personal problems. It's expensive and if one isn't very careful it can stay on the credit reports for up to 10 years. The truck repo will only stay there 5 years and will have less and less impact on the decisions of potential creditors as time goes on.

Is there any way to get the creditors to go after him (particularly on the truck),

Chances are not that great, especially if one is co-signer on the note.

and to clean up the credit reports?

The two should be viewed as entirely separate matters to the greates extent possible. There are so called credit repair firms out there who claim they can clean up your credit files for you. Statistically speaking those who do their own credit repair and those who use the services of the CROs usually have about the same amount of success which should easily teach one that there is no need to pay a credit repair firm to do that for you. They simply cannot do anything for you that you cannot do for yourself and that's one of the messages that the FTC and Attorney's Generals nationwide try to get out before the people and with good reason. The government is also getting pretty unhappy with the debt repair people because far too many of them have charged excessive fees for making arrangements for the debtor to pay off the debts in supposed debt consolidation schemes and then ending up not getting that job done either. The debt repair industry isn't doing a lot better than the credit repair industry. People often get bit by either or both. Our government provided us with very strong medicine for our ills when they wrote FDCPA, FCRA, TILA and now GLBA adds a bit more to the consumer's arsenal. All one needs to do is to learn about them and how to use them and it's not at all necessary to hire others to "fix" such problems as you describe although I'm sure you have only described the "tip of the iceburg" and the problems are likely to be much worse than just a simple truck repo. It's generally better to stay away from all the supposedly "quick and dirty" fixes one hears about all the time. They are usually just exactly that.

According to the divorce settlement, these debts are his, but according to her lawyer, the debtors are not bound by that agreement.

Well, in my personal opinion these problems need to be sorted out into their separate categories when thinking about them in order to be able to visualize how to attack them. One problem is the divorce and it's aftermath, another is the truck repo and the 3rd is getting the credit cleaned up. While it's probably true that they are all intertwined it's still possible to look at them as separate issues when trying to figure out what to do about them.

By far the easiest to do something about is the problem of the bad credit. I'd tend to leave the truck repo until the very last item on the agenda if at all possible. Do something about the rest of the bills and debts first and leave the truck thing go as long as possible. Once all of the other credit/debt problems are resolved the truck repo will have aged a bit and it won't make that much difference unless one attempts to buy a home or other real estate sized purchase. Then it really would be a major pain.

Paying the bills off or negotiating for settlement for a lesser amount won't do anything for your credit either since each one you pay off will report the situation as a chargeoff/settled or other similiar notation which can't easily be gotten off your credit reports and paying them off instantly deprives you of any and all protections you may have had under FDCPA for the simple reason that nobody is trying to collect money from you once it's paid off. You admitted you owed the debt when you paid it off, so you have no way left to keep that bad mark off your credit reports. In fact you probably just cemented it there for the next several years when you paid it off.

Sometimes you can negotiate a situation where you pay off the balance in full in return for an agreement that the creditor or 3rd party collector removes the derogatory from the public records and makes no statement at all. Most don't want to do that and falsely claim that the law makes them put the notation on your credit report. It isn't the law that makes them do it, it's their contracts with the credit bureaus that makes them do it. So never trust anything a collector says unless it's in writing.

Never make any payment on a delinquent account with a personal check. Always use a money order or a bank cashier's check and never from the same bank you do business with. You should use a restrictive endorsement on the back of the money order you use to make the final payment which creates a legally binding upon it's cashing which forces them to remove all derogatories from your credit reports. They may or may not want to accept any money order or check with a restrictive endorsement stamped on the back but that's another whole ballgame. The rubber stamp to get that job done is quite expensive. I have a few of them and we use them just about every day. It's usually used only in cases where the bill is much too small to argue about or try to fight over. Usually under $100 is when it's not worth them fighting over the restrictive endorsement. Most of the time the bill is less than the cost of the rubber stamp.

So to try to sum it all up, credit repair isn't a very good way to go nor is debt repair and bankruptcy is usually pretty terrible too. The government is trying to do all it can to make that even painful than ever before and the government hates credit repair and debt repair (consolidation) and bill collectors don't want to treat people right either so paying them off is also full of bad and hurtful problems. So what is one to do? It's not hard at all and the answers are readily available and easy to find.

[email]bbauer1@netzero.net[/email]

bbauer,

I'd tend to agree with you - bankruptcy was the last thing considered - this has been an ongoing problem for quite awhile. The question is though - how do we get the creditors to repo the truck, or otherwise get it reposessed? How do we keep them off of my sister's back, considering that while she cannot afford to pay them (and really shouldn't have to - she paid half of all the marital debts, and much of the truck which was always his), related to her ex (who just quit a job because child support found him), she's the deep pockets in this matter, with a consistent job and income. It seems without a bankruptcy, nothing will happen - or am I wrong? Will the creditors go after him to reposess the truck, and when they do, what will happen to the balance of the loan that the sale of the truck will not cover?

Evan Wilson

The question is though - how do we get the creditors to repo the truck, or otherwise get it reposessed?

Don't seem logical that she would want to do that. Seems to me that if the truck is now on her credit the repo would get pegged onto her credit as well and that would be far worse then what she has now.

How do we keep them off of my sister's back, considering that while she cannot afford to pay them (and really shouldn't have to - she paid half of all the marital debts, and much of the truck which was always his), related to her ex (who just quit a job because child support found him), she's the deep pockets in this matter, with a consistent job and income. It seems without a bankruptcy, nothing will happen - or am I wrong?

We can spend all day guessing what might happen and maybe still not hit the actual end result. Since we can't always forsee the future, we sometimes do things we truly regret having done later. Obviously the marriage itself turned out to be that way. The truck purchase has also turned out to be the same. And sometimes we have to live with our choices and see them through to the bitter end no matter what that might turn out to be. In many situations it is better to just lie behind the log and see what transpires and then act when we see the entire picture as it will unfold. This may be one of those kinds of situations. In part, it may also depend upon what the rest of her credit picture might be. If it's a total shambles then she may be better of doing something positive about that and just lie behind the log on the truck until something transpires. I sure would not go trying to kick sleeping dogs and getting bit.
I'd tend to think she ought to see a good attorney and she might have to talk to a dozen or so before she can find a good one.

Will the creditors go after him to reposess the truck,

We can't read the creditor's minds. We can assume that they will go after him and reposses the truck simply because they almost always do, but there are those situations in which they end up making the decision that it isn't worth the effort. A lot depends on the market value of the truck compared to the costs of laying hands on it. Therefore, it can be difficult to forsee what they might do and more especially so since we don't know what the market value of the truck might be or what condition it's in right now. We would really have to know a lot more about that before a really intelligent guess can be made. Although many of these so-called and self styled gurus pretend they can tell you all about your problems, doing so without having all the facts at hand is dangerous at best.

and when they do, what will happen to the balance of the loan that the sale of the truck will not cover?

Well, that's pretty well guessable. They will more than likely go after who ever has their names on the note and the title. They never miss on that one. We simply need much more facts than we have now in order to make educated guesses as to what would be the best thing to do. Looks to me like she will need to find a good attorney no matter what she does.