I think you're wise to push for the refinance in terms of your credit history. The horror stories you've heard are very real, but don't let it stop you from applying for either a car, home or other large secured debt, again with a reputable bank/finance company. You may want to contact the particular creditor directly to find out what their policy is, should one of the parties default on the payments, but be prepared for the standard response. You're jointly obligated for that note. You already know that. The good news (and there is some here) is that there are certain measures as put down by law (called the Fair Debt Collection Practicies Act) that you may want to study up on. It specifically addresses how anyone can pursue you to collect on the loan, should it default. And any reputable lending institution will very definitely take your circumstances into consideration when you apply for new credit. I can assure you of both.

Again, out of curiosity, does your settlement agreement specify this particular debt?

*Adding a link from my place of employment: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm