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A reader wonders how to change the name on a loan after a divorce. She says “My divorce was final August 2001. In 1997 my ex husband took out a loan from his job. This is a joint account. This still shows up on my credit as a joint account. I received a letter from his employer stating that we no longer have a joint account, that the account that was opened in 1997 was paid in full, and currently all loans are single loans under his name.”
Since that time, the reader has learned that the account still exists in both her and her ex-husband’s name, and that her ex-husband has run up a substantial balance on the loan. She is wondering what she should do.
If she were my client, the first thing that I would have her do is contact the employer’s legal department (if they don’t have a legal department, I’d try the HR department), and provide them with a copy of the letter saying that they had already taken her name off the loan, and demand that they do so now. I’d have her be sure to also include a copy of the divorce decree, showing that it is dated before the new loan was taken out by her ex-husband.
Secondly, if she lives in one of the community property states, I’d have her remind them that they themselves acknowledged that the previous joint loan had been paid down to zero, and that any debt incurred by a party after separation or divorce is the sole and separate debt of the incurring spouse.
Thirdly, I would have her contact one of the three main credit bureaus; everyone is entitled to one free credit report a year from them. I would have her get that credit report, find the loan on it, and contest it, lodging a complaint with the credit bureau, providing them with all the same information that she is providing to the employer.
If none of that worked, I would then write a letter on her behalf to the employer, as her attorney, demanding that they remove her from the loan.
While some or all of the above should work, there is no guarantee that it will, as, depending on the state in which she lives, the employer may not be obligated to remove her from the loan, as it may in fact legally still be a joint debt.
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