Your Divorce and Your Credit: Are You Prepared?
Wednesday, December 10th, 2008As finances are one of the chief reasons many couples ultimately choose to end their marriage, it is important to note that 
divorce will not solve your credit woes. In fact, divorce can only add to the stress and pressures of your bad credit ratings and a poor financial track record.
As a married couple, the debts you incurred are shared equally. Whether it be a credit card account or a mortgage, married couples share responsibility for the debts, even long after the divorce papers have been signed, sealed, and delivered. In the event of foreclosure or default, a divorced couple will each be held responsible for the monies due as if they were still married. It is not uncommon for many divorced couples to be astounded when they find that each of their ex’s current information is still connected to their own individual credit files. This may not be a problem if you former spouse is diligent about making payments and keep their credit in the highest standing but it can severely damage your credit if your ex is not doing so great keeping up with the bills.
Whether you are just now considering a divorce or if you have been legally divorced for quite some time, there are things you should know about your credit and your divorce. Here are some vital questions you need to find the answers to before it is too late.
Do You Know Your Rights?
Many couples may not even know what accounts their name is listed on along with their spouse’s. If you are listed on any account as an authorized user, you should be able to have your name removed from the account without too much trouble. You may not be able to always make that happen on your own. It may require the account holder to contact the credit card company and make the change. It depends on the company you are dealing with. Being an authorized user does not make you responsible for the account holder’s debt and it may not allow you to make major changes to the account on your own.
Get Set To Refinance
Differing from the authorized user, a joint account holder is another issue. A joint account holder is equally responsible for the debt incurred. If you co-own a mortgage, credit card account, or a car loan with your soon-to-be ex, you will need to refinance the debts you have jointly as soon as possible. This will entail closing all credit card accounts that are jointly held and opening a new account in your own name where you can transfer the balances. If it is a mortgage or other type of loan, you will have to go through the individual process of refinancing the loans based on your change of marital status. It may not always be a walk in the park to refinance your debts, especially if you and your spouse are upside down on a loan or when you are finding it hard to equally split the debts you owe together. If you can resolve the problems amicably, you may not struggle too much but if you can not adequately handle the situation, employing a mediator or an attorney to assist you with the refinancing process may be the best bet.
Check Your Credit Often
If refinancing jointly owned debts is not an option, make sure you check in with your credit report regularly to ensure your ex is holding up their end of the bargain and paying on time. Make sure that your ex’s connection to your credit report isn’t fraudulent or abusive, as in they are running up bills to ruin your credit out of spite.
Overall, despite the reasons for the divorce and incompatibility, your credit is still your responsibility that you should attend to diligently. You can not afford to assume that your ex will take care of the debts and you can just sit back and relax. It is ultimately your responsibility to do everything within your power to maintain good credit and to see all debts through till the end.
January 2nd, 2009 at 2:00 pm
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