Advice on possible damage to credit?

SoCal78_IHB

SoCal78_IHB

New member
I wonder if anyone knows about this.



My friend just left her husband and is about to file for divorce. They are renting an apartment month-to-month. Both of their names are on the lease. She just moved out in mid-February. Now he's late on March's rent and has decided to stop paying. The office has threatened eviction. She is very upset, thinking his actions will damage her credit. Will it?? Or would this even be reported to the credit bureaus? It's not as though this is a line of credit which needs repaying and he hasn't paid (like a car payment or credit card bill.) How does this work? Should she be concerned or would it not affect her credit? Thanks in advance.
 
[quote author="SoCal78" date=1236341298]I wonder if anyone knows about this.



My friend just left her husband and is about to file for divorce. They are renting an apartment month-to-month. Both of their names are on the lease. She just moved out in mid-February. Now he's late on March's rent and has decided to stop paying. The office has threatened eviction. She is very upset, thinking his actions will damage her credit. Will it?? Or would this even be reported to the credit bureaus? It's not as though this is a line of credit which needs repaying and he hasn't paid (like a car payment or credit card bill.) How does this work? Should she be concerned or would it not affect her credit? Thanks in advance.</blockquote>


I believe that it all depends on the complex. I know that when I moved into my current place, I was able to see them pull my credit on my credit report afterwards. If it's a small place, then they probably wouldn't report to the credit bureaus. If it's a larger complex (or part of a company like TIC), then they probably do report to the credit bureaus.



Regardless of whether they will report to the credit bureaus or not, it is a VERY good idea for your friend to see the manager and have her name removed from the lease.
 
As long as her name is on the lease, she is responsible. The credit agency could care less about her relationship breakups or what not.

It's the same as you co-signing a car loan to help your friend, and then she decides not to make payments anymore and declares bankrupcy. You are now responsible.



Now, they can work out a deal where she gets taken off the lease, however her husband will have to agree to the terms as well.
 
Thanks, guys. She did try to get her name removed from the lease. But they would only remove her name if he qualified on his own, which he did not, so they had to give a 30-day notice... which led to where they are now.
 
[quote author="SoCal78" date=1236342315]Thanks, guys. She did try to get her name removed from the lease. But they would only remove her name if he qualified on his own, which he did not, so they had to give a 30-day notice... which led to where they are now.</blockquote>


We've quickly gone outside of my area of expertise. But a quick Google shows <a href="http://family-law.lawyers.com/divorce/Apartment-or-House-Lease-in-Divorce.html">this</a> link. Though not specific to California law, I believe the advice is worth researching further. In particular, from the link:



<em>If a landlord will not allow one of the spouses to remove his or her name from the leasehold, consider including a ''hold-harmless'' clause in the agreement indemnifying the out-spouse from liability</em>
 
If there is an outstanding balance at the end of the 30 days, she will need to make sure it is paid, because, yes, this will affect her credit. I know from personal experience after moving out of an apartment and having a roommate not pay the rent.
 
That is a rough situation, and if he is actually living there and not paying the rent then I see why she's leaving him. If not, well, I wouldn't have expected him to pay for an apartment he's not living in.



If she cares about her credit, then she may just have to suck it up and pay. If they gave their 30 days then it shouldn't be that much back rent owed. I know it's not fair, but sometimes upfront expenses can bring happiness later. That, and one less entanglement is good for everyone's mental well-being.
 
[quote author="caycifish" date=1236347906]That is a rough situation, and if he is actually living there and not paying the rent then I see why she's leaving him. If not, well, I wouldn't have expected him to pay for an apartment he's not living in.



If she cares about her credit, then she may just have to suck it up and pay. If they gave their 30 days then it shouldn't be that much back rent owed. I know it's not fair, but sometimes upfront expenses can bring happiness later. That, and one less entanglement is good for everyone's mental well-being.</blockquote>


Thanks, Cayci. I agree - before I suggested to her to just pony up and make it go away, it's not worth the trouble. She said she would if she had the money, but she doesn't. They racked up debt while married and she is walking away with the vast majority of it in her name. (Ex: she is primary account holder on all their CC's because he had previous damaged credit.) The apartment complex is managed by Lyon, I found out. So -- maybe they will report it. I guess we'll see how this plays out.
 
[quote author="SoCal78" date=1236389960][quote author="caycifish" date=1236347906]That is a rough situation, and if he is actually living there and not paying the rent then I see why she's leaving him. If not, well, I wouldn't have expected him to pay for an apartment he's not living in.



If she cares about her credit, then she may just have to suck it up and pay. If they gave their 30 days then it shouldn't be that much back rent owed. I know it's not fair, but sometimes upfront expenses can bring happiness later. That, and one less entanglement is good for everyone's mental well-being.</blockquote>


Thanks, Cayci. I agree - before I suggested to her to just pony up and make it go away, it's not worth the trouble. She said she would if she had the money, but she doesn't. They racked up debt while married and she is walking away with the vast majority of it in her name. (Ex: she is primary account holder on all their CC's because he had previous damaged credit due to nonpayments and he's even been in trouble with the IRS - surprise! Plus she has a bit of a shopping addiction. A match made in heaven.) The apartment complex is managed by Lyon, I found out. So -- maybe they will report it. I guess we'll see how this plays out.</blockquote>


Debt racked up while married is joint debt. 1-2 hours of an attorney's time will help her fill out the right forms to file with the court so that she doesn't get quite so shafted. I did a lot of research online first so I only needed 1:15. If she doesn't want to put in the time or effort, paying it off herself is an alternative.



I hear that on the debt being in her name. I'm still dealing with my last "entanglement" due to me being the one with the good credit. If it helps her make a decision, let her know that creditors do indeed call early on Saturday mornings and the DMV can in fact garnish your wages. Pay up or jump through the hoops to get help paying it. Make it go away. That's my advice.
 
I think what Cayci is saying is absolutely right. You have to take the hit (although that's harder if you can't afford it), consider it a learning experience that will last a lifetime and move on. I think you have to consider all of the financial troubles you would have been in if you had stayed in the relationship, at least it all stops now. Tell her not to beat herself up over bad decisions that are in the past. I guess it's harder to say than to do, but in the long run, it will all work out. Sounds like Cayci and I know from experience.
 
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