Divorce and Debt: Credit Concerns for the Legally Separated
There’s no question that most divorce proceedings are difficult matters which take their toll on both parties involved. The division of property, assets and other holdings that were amassed during the course of a marriage can leave bitter and unresolved conflicts. However, what some people do not realize, (and later find out to their detriment) is that debts are not as easily divided as assets. This can cause major problems with credit down the line in those instances where one spouse may still be held liable for the debts of an ex.
Pay Attention to the Contract
It doesn’t matter who the divorce decree stipulates as the responsible party for the debt. What matters is the name on the dotted line. If you signed a contract, you are responsible for the debt, even if the divorce decree says your ex is supposed to pay up. If he or she fails to meet the obligation, it’s your credit that will suffer, not your ex’s. So you may want to be particularly careful of those debts you have your ex to take on, if you have any reason to suspect that they won’t be paid in a timely fashion.
Get Credit in Your Own Name
Years of marriage can leave you sorely lacking in the credit history department if everything is in your spouse’s name. Even if you help pay for the house, the car, that business loan or any other debts of the household, if your name isn’t listed, that pristine payment record will not show up on your credit history. Even if you have no plans of divorce, it’s still a smart move to have both spouses jointly responsible for major household purchases such as a house or a car – that positive payment history can help you get credit on your own if someday you and your spouse do call it quits.
Keep a Close Eye on Your Credit Report
Your ex likely had access to all of your personal information throughout the course of the marriage. Sadly, most cases of identity theft are perpetrated by someone that the victim knows. If you’re recently divorced, make certain that all joint accounts are closed, and take extra measures to ensure that no one else is opening accounts in your name with your personal information.
Hire a Credit Repair Service
If a divorce has put a blemish on your credit, don’t despair. Quality credit repair companies are often able to clear up inaccuracies caused by divorce, and any debt that is not your legal responsibility can always be disputed and removed from your credit report. So if you are recently divorced, or in the middle of a divorce, don’t let credit problems catch you by surprise. Be proactive and take measures to preserve the good credit you’ve built over the years of your marriage.
