Getting divorced can have a serious impact on your credit. The effect divorce has on your credit depends on what kind of accounts you held during marriage:
- Individual Accounts: These are accounts that you open by yourself. You alone are responsible for any debt on these accounts. In some community property states, these accounts may also show up on your spouse's credit report as he or she also may be liable. Individual Accounts are the least susceptible to credit problems upon divorce.
- Joint Accounts: No matter what, you and your spouse are responsible for seeing that debts are paid for a joint account. Joint accounts appear on both spouses' credit reports. A former spouse who runs up debt on a joint account and doesn't pay them can hurt their ex-partner's credit report.
- User Accounts: Individually opened accounts often allow the credit holder to add authorized users as a convenience. A creditor who reports the credit history to a credit bureau must report it in the user's name as well as the primary credit holder's name. These accounts benefit people who can't qualify for credit on their own (e.g., students or homemakers). While these people can use an account, the credit holders, not the credit users, are contractually liable for paying the debt.
How Can I Make Sure Divorce Doesn't Ruin My Credit?
You should take special precautions to make sure your credit isn't ruined. There are a few things you can do to protect yourself:
- Pay special attention to the status of your accounts
- If you maintain joint accounts, it's important to make regular payments so your credit record won't suffer
- Close joint accounts or user accounts
- Ask your creditors to convert certain joint or user accounts to individual accounts. By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. In some cases, you may have to reapply to open an account in your own name.
Should I Contact an Attorney?
Making sure your credit isn't adversely affected by divorce can be difficult. An experienced family lawyer will knows the best way to structure your official divorce settlement so as to avoid credit problems.