CONSUMERS : Ex-Wife’s Bankruptcy Causes Problems

Question: Five months after our divorce, my former wife filed for bankruptcy. Her bankruptcy has shown up on my credit reports ever since, as shown in the enclosed letter from a Maryland bank. On the back of a TRW credit report are these words: “Responsibility of payment ordered by a divorce court does not waive the terms of the original contract you made with credit grantors.” OK.

Three of the five creditors the divorce court ordered her to pay sued me at a later date, though my credit report still shows those same debts as having been discharged. I have written many letters trying to resolve this. These are my questions:

Why do I have a bankruptcy (the ex-wife’s) on my credit record because my ex-wife wrote off former joint accounts? Isn’t TRW required to include my explanation? More generally, what rights do former husbands or wives have in such a situation? --M.M.

Answer: There are a lot of bad tastes that linger on long after a divorce and, unfortunately, according to Jennifer Neu, TRW Information Services’ media communications specialist, this is an increasingly common one. In the heat of the split-up, both parties to a divorce are inclined to forget that--in the eyes of credit grantors--they are still a team as far as joint accounts are concerned. And, if one flakes out and takes a bankruptcy, still they’ve both had a hand in the debt as far as cold, impersonal credit reports are concerned.

In your case, Neu said after checking your case, there’s no actual bankruptcy showing--only one line on the report indicating that the debt has been liquidated as a result of bankruptcy.

There’s nothing on the entry to indicate that it’s his bankruptcy. But someone skimming it hurriedly--which apparently was the case--didn’t draw any distinction between the two account holders, Neu said. And, unfortunately, that’s the usual case.

Which is also why, Neu added, that couples confronting a divorce situation should make every effort to get those joint accounts closed out before the divorce becomes final or, if that isn’t possible, to make every effort to have the balances due on all of the accounts transferred to the two parties as individuals.

As in the case of all credit records, only the credit grantor has the authority to remove a negative item like this from your record. But, if you feel the inclusion of that liquidation (or, at least, the way it is phrased on your record) is in error, Neu adds that TRW will be glad to work with you in petitioning the credit grantor to remove it.

“There is a danger here, though,” she says. “Since the debt was liquidated, the credit grantor could pursue him to make it good as a price for removing the black mark from his record.”

And, as unromantic as it may sound, couples contemplating marriage should also show a little curiosity about their new partner’s past credit record. A husband-to-be who, for instance, has a negative entry on his credit record prior to the marriage will carry it with him after the marriage too, and any credit applications filed by the wife--under her new name or jointly--will turn up the husband’s past troubles.

“She can, of course,” Neu added, “file for credit under her own name only and avoid this, but then there’s the possibility that, on the basis of one income, she might not qualify on her own.”

You can, of course, enter an explanation (no more than 100 words) on your record pointing out that the liquidation-through-bankruptcy was your ex-wife’s, not yours.

But TRW’s record shows that you haven’t entered such an explanation.

“What possibly happened,” Neu said, “was that he tried to enter an explanation that was too general, and we didn’t accept it for that reason.”

That is, such explanations must address themselves to one specific negative report--you can’t simply say, in effect, “All bankruptcies that may appear on my credit report are a result of my ex-wife’s actions.” If you’ve been turned down for a credit card by, say, Snug-as-a-Bug National Bank on the basis of the bankruptcy liquidation, then you’ve got to address your explanation specifically to Snug-as-a-Bug’s rejection of you.

Campbell cannot answer mail personally but will respond in this column to consumer questions of general interest. Write to Consumer VIEWS, You section, The Times, Times Mirror Square, Los Angeles 90053.