Joshua Was 12 Days From Closing When a Debt That Wasn't His Almost Killed His VA Loan
Joshua was twelve days from closing on a home near Fort Jackson when his loan officer called with the kind of news no buyer wants to hear. His debt-to-income ratio had blown past the limit. The house he already had a move-in date for was about to fall through.
The strange part: the debt pushing him over the edge wasn't his. It was a car loan that belonged to his ex-wife, a debt that had gone delinquent months earlier but was still showing up on his credit report, still being counted against him in the math that decides whether a VA loan gets approved.
What Most Veterans Get Wrong About Old Joint Debts
This situation comes up often for veterans working through a VA loan after a divorce. The assumption is simple and usually wrong: if your name is on an account, that debt is permanently yours on paper, no matter what a divorce decree says. Lenders see a delinquent balance on a credit report and treat it as a red flag without asking the next question, which is who the decree actually assigned that debt to.
The VA Guideline That Changes Everything
VA guidance addresses this directly. It states: "Debts assigned to an ex-spouse by a divorce decree will not generally be charged against a borrower. This includes debts that are now delinquent."
That second sentence is the part loan officers tend to miss. A delinquent status often triggers an automatic red flag in underwriting software, and without someone pulling the decree and applying this specific guideline, the debt stays counted against the veteran's ratio. The debt itself hasn't changed. What's missing is documentation and the right guideline citation.
How Joshua Got His Closing Back on Track
Joshua pulled his divorce decree and found the paragraph that assigned the car loan to his ex-spouse. He brought it to his loan officer and had him apply the correct section of VA guidance to exclude that debt from the debt-to-income calculation. With the debt removed from his ratio, his file was back within range in time to close.
What To Do If You're in Joshua's Position
If you're a veteran or active-duty service member going through a divorce and applying for a VA loan, don't wait for your loan officer to flag the problem. Pull your divorce decree now. Find the paragraph that assigns any shared debts, delinquent or not, to your ex-spouse. Then specifically tell your loan officer to apply VA guideline Chapter 4, Topic 5, Subsection c to exclude that debt from your debt-to-income calculation.
This single document and this single guideline citation can be the difference between a closing that happens on schedule and one that collapses twelve days out.
Work With Someone Who Knows Where to Look
I'm Jason Sharon, a licensed mortgage broker with Home Loans Inc. I spend my time in the actual guidelines, not just the credit report summary, because that's where the path through a complicated file usually is. If you're a veteran navigating divorce and a VA loan, call me at 843-569-7283. I find the path.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
