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Bill

SB 5863

Prohibiting credit reporting on delinquent accounts that are designated to a person in a divorce.

2023-2024 Regular Session Introduced by Perry Dozier and 4 co-sponsors

SB 5863 prohibits credit bureaus from reporting delinquent accounts assigned to ex-spouses in divorce decrees, protecting individuals from credit damage for debts they're legally not responsible for.

Public hearing in the Senate Committee on Business, Financial Services, Gaming & Trade at 8:00 AM.
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WeVote Research Nonpartisan
Bill Summary · SB 5863

Legislative bill overview

SB 5863 would prohibit credit reporting agencies from reporting delinquent accounts on a person's credit report if those accounts were designated to that person as part of a divorce settlement. The bill aims to protect divorced individuals from credit damage resulting from debts assigned to their ex-spouse during divorce proceedings.

Why is this important

Divorce settlements often assign specific debts to each party, but creditors may not recognize these assignments and can still report delinquency on both parties' credit reports. This creates a situation where someone can have their credit damaged for debts they're not legally responsible for under the divorce decree, potentially affecting their ability to obtain loans, housing, or employment. The bill addresses a real gap between family law (which binds divorcing parties) and credit reporting practices (which don't automatically recognize divorce decrees).

Potential points of contention

  • Credit reporting industry opposition: Credit bureaus may argue this creates administrative burden and that creditors—not reporting agencies—should enforce divorce decrees, raising implementation questions about verification
  • Creditor accountability gap: The bill doesn't appear to address how creditors themselves will recognize and honor divorce designations, potentially leaving the core problem unresolved
  • Defining "designated" accounts: Ambiguity about what counts as a designated account (only jointly-held debts? all marital debts?) could create disputes and inconsistent application

Compiled from official sources — confirm details with the bill’s official record.

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