How many years is a bankruptcy suppose to stay on my credit? ...George  from   Mountain Home

George, that is a GREAT question.  There is NOWHERE where it says that a bankruptcy should stay on your credit NOT EVEN 1 DAY.  The law states that a bankruptcy HAS to be removed after the 10 year mark.  Most people get confused by this law, because they think it is a necessary item to be reported on their credit, when the truth of the matter is that NOTHING has to be reported on your credit.  The sad thing about it is, that the courts do not even report bankruptcy.  IF you doubt this fact please feel free to call the courts;  here is the phone number to the obe in Idaho (208)334-1074.  They will tell you that they NEVER report to the credit bureaus.  So where do they get this information?  they seek it out from public records, and put it upon themselves to report it.  that leaves them the burden of proof......I could write two more pages on this subject, but I hope this has helped you and please keep the questions coming.  Submit your questions on our Contact Us page.

11/04/08 

Does a divorce decree stop the responsibility's of having to pay a debt from a Ex ? 

Myths About Divorce Decrees

Divorce lawyers may tell you that your creditors will accept the divorce decree and relieve you of your ex's debt. Don't believe them. When two people jointly apply for credit, they sign a legal agreement to the creditor to pay back the debt. If one can't pay, the other is responsible. A court cannot overturn contracts between individuals unless they are fraudulent or not lawful. A divorce does not fit either of these definitions, so the contract remains in tact until the contract ends (when the debt is paid off).

I can't tell you how many letters I've received that go basically like this:

Hello,

I was divorced 4 years ago, and in the division of our debts, my divorce decree specified that my ex-wife was responsible for the mortgage. She gave up some equity in investments so she could keep the house, which I Quit Claimed over to her.

My new wife and I applied for a mortgage recently. To my surprise, we were turned down because my ex is currently 90 days late on the mortgage, and it's showing up on my report. I contacted the credit bureaus to dispute this, but they won't take it off. What can I do to get this off my report? The debt isn't mine.

Worried Ex

The answer to this question is always:

So what's the deal here?

Myth 1#: A divorce decree can relieve a spouse from financial obligations of joint debts.
Fact: Debts that were obtained in the name of both spouses before a divorce (meaning both the husband and wife signed a document or application saying that they were both responsible for the debt) remain the obligation of both parties after a divorce, no matter what a divorce decree says.

Why? Because both of you signed a legally binding contract with the creditor, and the divorce decree does not amend this contract. Amendment of any contract requires agreement by all parties (including the creditor). Proof of the amendment requires the signature of all parties. During a divorce, the creditors are not even consulted, let alone a part of the divorce courts, and therefore the original agreements/contracts stand. Consequently, if your ex-spouse does not pay a debt that he was assigned in a divorce decree, then you are responsible for it.

Myth 2#: A divorce decree protects my credit if my ex-spouse doesn't pay the debts they were assigned in the divorce.
Fact: If you have a joint financial obligation with your ex-spouse, and your divorce decree states that your ex-spouse is responsible, and your ex-spouse is delinquent on paying, your credit as well as his is affected. As stated above, your legal responsibility for a debt does not go away because a divorce decree assigns responsibility for a debt to your ex-spouse. Along with a legal responsibility to pay comes the right of the creditor to report a debt delinquent on your credit report if it is not paid as agreed in the original contract. Period.

Especially tragic are situations where one ex-spouse files bankruptcy and includes many joint debts in the BK. The spouse not filing bankruptcy is left holding the bag for these joint debts, and many times is not notified of the ex-spouse's filing until months or years down the road when it is too late to correct the situation. So not only is the spouse who didn't file BK responsible for the unpaid debts (and can be legally sued for them), but the non-filing BK spouse's credit also is ruined - something that cannot be corrected - because the credit bureaus have the right to report them delinquent.

Understanding why credit repair is not easy and why the process has to be regulated takes a little understanding of the economics driving the credit bureaus; the main three of which are Equifax, Experian, and TransUnion. To start with and contrary to what many people believe, credit bureaus are not government entities. They are for profit corporations that make money by collecting your personal information and selling it to interested parties. They are regulated by laws created to oversee credit bureaus but they are not created as a result of legislation.

Being for profit means that the credit bureaus, like any other business, want to focus on the activities that make them money and streamline or do away with activities that do not generate revenue. This applies to credit report repair because the credit bureaus do not make any money off of repairing your credit reports. In truth, if it weren't for the fact that they are required by law to investigate consumer disputes, the credit bureaus wouldn't even bother with the practice in the first place. For the credit bureaus, credit report repair is a drain on resources with zero return on investment.

So as a consequence of their economics, the credit bureaus do not want to make it easy for you to repair your credit but even more than that, no one other than yourself wants you to remove errors from your credit report. You are not the primary client of the credit bureaus and until the credit bureaus began selling credit reports directly to consumers (a service that is only necessary because of credit report errors), the credit bureaus could not profit from you at all. It is the creditors that the credit bureaus traditionally profit from and these creditors also do not want you to repair your credit reports. And why is that? It's because people with errors on their credit reports have lower credit scores; low credit scores that are not an accurate representation of who they are as a lender. This means that creditors can demand a higher interest rate and make more money from you even though you do not pose a credit risk equal to the risk that your bad credit score implies.

Now that we know why the credit bureaus make credit repair difficult the question is how? The answer is by using the same laws that have been enacted to allow consumers to dispute negative items in their credit reports. Credit report legislation states that consumers are able to dispute any items on their credit reports that they feel are "inaccurate, unverifiable, or misleading". These vaguely defined terms make it possible to dispute a lot of items on credit reports, even ones that the consumer knows to be accurate.

To counter the vague parameters provided to the individual consumers, the credit bureaus were also provided with even more abstract rules. According to the legislation, the credit bureaus are required to investigate consumer disputes unless they feel the disputes are "Frivolous or Irrelevant" and they take full advantage of this leeway. The credit bureaus set up "gatekeepers" who accept all consumer disputes and decide which disputes warrant an investigation, and since these gatekeepers work for the credit bureaus, they are clearly biased towards the credit bureaus and against you. Getting past the gatekeepers becomes the largest hurdle in credit report repair and frequently devolves into a trial and error process of writing letters, waiting, fielding rejections or stall letters, and starting all over again.

A Licensed Credit Repair Organizations are exempt from this law called Frivolous or irrelevant

Easy Credit Report Repair

Credit report repair can still be an easy process from your perspective; it just requires a simpler allocation of resources. Instead of spending resources in the form of time and effort, you can spend a little money to have an expert repair your credit for you. What's more, just like when you pay professional installers to replace your carpeting instead of performing the process yourself, you will end up with a Quality finished product in less time.

Professional credit report repair is easy. It is simply a matter of getting your credit reports, providing them to a credit repair agency, selecting which items on your report you want to dispute, and letting them manage the process from there.

Unfortunately, the answer is no. If you are unable to negotiate the way the account will appear on your credit report, what will happen is that the debt will appear on your credit report as "Paid", or "Paid Collection". This will help your credit score only marginally, but having this collection paid is definitely better than unpaid. So why would someone want to pay off a debt, then?

• If you are purchasing a home, the mortgage company is absolutely going to force you to pay this collection off. You just aren't going to be able to argue with them, even if you think the collection is unfair, or you are still fighting to prove it isn't yours.
• Don't you want to get those pesky collectio agencies off your back? You can run, but you can't hide - they will find you eventually.
• How about the moral reasons? If the debt is yours, don't you think you own up to it? Someone paid good money for the goods or service you received and you haven't compensated them for it.