Divorce and Credit Card Debt

Staying married isn’t easy. This is the main reason that so many people give up.

However, staying together through financial hardships makes it even harder. Not only do you have tough personal issues to deal with, but everyone is giving you conflicting financial advice that can wreak havoc on your credit.

A divorce decree doesn't resolve you from any responsibility for any jointly held accounts.

When you apply for a joint account, you and your spouse sign a legally binding document that holds both of you liable. The divorce decree is a separate binding agreement between two individuals who agree to divorce. It does not alter previous agreements between you and other creditors.

The credit card company doesn’t care who made the charges (if it's a credit card). It doesn't even matter who agreed to pay in the divorce decree. It definitely doesn't matter to the credit card company that you're getting divorced. They will try to collect from both people on the account.

Close Jointly Held Credit Cards Prior to Divorce
Here’s a tip…don't sign a divorce petition until all your jointly held credit is closed, refinanced into separate accounts, or balances are paid in full. Guarantees to fulfill at a later time or by a certain date can be missed and costly to impose.

Closing a jointly held account does not mean that your ex-spouse has signed a promissory note or some other legal document promising to pay off debt. Simply because you write something in the divorce settlement or "agree" upon it while you are still married—it does not mean you are free and clear. A careless or resentful ex-husband or ex-wife can be disastrous to your credit rating for many years after your divorce in final. It's legal harassment in its purest form.

The point is, don't sign a divorce decree before you resolve all credit matters. Signing the divorce decree should be your ace-in-the-hole and a leverage tool to make things happen the way you want.

Divorce Doesn’t Absolve Credit Responsibility
What I've gleaned from divorced couples I've talked with is that they believe signing papers at the lawyer's office resolves everything. It doesn't.

You need to truly resolve matters, which, as I wrote above, means get your name removed from everything jointly held before you sign the divorce papers. That could mean refinancing, creating individual accounts, paying off debt, closing accounts, or whatever it takes.

The last thing you need are late payments appearing on your personal credit reports when you are trying to rebuild your bad credit. A series of recent late payments can damage your credit score rating which will cripple your chances of getting low interest rates anytime soon.

If you plan ahead and pay close attention to credit accounts held jointly, you can ensure that your personal credit reports and FICO credit scores won't get damaged any worse. This is something that your divorce attorney will never tell you about. It's not their area of expertise. They simply don't know what kind of impact a divorce will have on your personal credit reports and credit scores. And frankly, they don't usually care.

When you're married, it's often easier to just make all accounts joint accounts. Many of us do it without even thinking. However, if you can both agree to have separate accounts in addition to your joint accounts, it can potentially save months and years of frustration for both of you if you do get divorced--or, for that matter, if there's an unexpected death, disability or layoff.

Credit Tips to Help Through Divorce
Close all jointly held accounts prior to separation or divorce to thwart your former spouse from running up the balance and leaving you accountable for paying it off. Closing accounts prior to separation will make it much simpler since your spouse is more likely to work with you. Certain lenders may insist that the primary account holder closes the account. If your not that person, then you will need the assistance of your soon to be ex-spouse.
Establish separate accounts so that that each of you is accountable for your own accounts. You also won't have to worry about rebuilding your credit.
Arrange separate lines of credit with the same credit card companies to substitute each jointly held account and transfer agreed upon balances to those new accounts. You want to avoid paying any new charges your ex-spouse makes.
Some creditors will require you to pay off the account before they put it in an individual name. If you cannot pay off the balance, at least try to close the account to prevent any new charges.
It would be smart to get a lawyer involved if your credit card company refuses to work with you. The lawyer will require is a copy of the agreement you signed.
Try settling the account with the credit card company by offering to pay a lesser amount than what is owed. Make sure to get all promises in writing from the credit card company. Also make sure they will not report or try to collect on the deficiency balance.
Pay the jointly held bills yourself--then go after your spouse for the money owed.
Don’t forget, any credit held jointly that is reported as a late payment after your divorce will affect both of you. You should still monitor jointly held accounts on a monthly basis by calling the credit card company directly to validate that the monthly payment was made.



Credit Secrets Bible ! The #1 Credit Course In America Click Here!

Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!

Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!

Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!

Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!

Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!

My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!

Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!