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In divorce proceedings? If joint credit is primarily in your spouse's name, you may find it difficult to obtain credit alone.
Important things to know about divorce decrees & credit. A divorce decree can endanger credit, and joint debts remain joint debts. Re-assigning debt in divorce decrees does not relieve a spouse of debt responsibility. If you cannot payoff debts, consider spouse debt negotiation.
Joint debts remain joint debts. Both spouses signed a legally binding contract with the creditor, and a divorce decree neither amends this contract nor relieves the creditor's investment in you. Amendment of any contract requires agreement by all parties, including the creditor, and proof of the amendment requires the signature of all parties. During a divorce, the creditors are not part of the divorce courts, and therefore the original agreements/contracts stand.
If you have a joint financial obligation with your ex-spouse, and your divorce decree states that your ex-spouse is responsible, and your ex-spouse is delinquent on paying, your credit as well as his/hers is affected. As is stated above, your legal responsibility for a debt does not go away because a divorce decree assigns responsibility for a debt to your ex-spouse. Along with a legal responsibility to pay comes the right of the creditor to report a debt delinquent on your credit report if it's not paid as agreed in the original contract.
Especially tragic are situations where one ex-spouse files bankruptcy and includes many joint debts in the bankruptcy. The spouse not filing bankruptcy is left holding the bag for these joint debts, and many times they're not notified of the ex-spouse's filing until months or years down the road when it's too late to correct the situation. So not only is the spouse who didn't file responsible for the unpaid debts and can be legally sued for them, but the non-filing bankruptcy spouse's credit is also ruined, something that cannot be corrected, as the credit bureaus have the right to report them delinquent.
The purpose of divorce is to split off emotionally and financially from your ex-spouse. If you aren't careful, your spouse's handling of your once-joint accounts can haunt for years. If you had joint debts which existed before your divorce, and these accounts are not both paid off and closed, you're just asking for trouble. Also, although some divorcing couples are definitely out to get each other, most problems with joint accounts prior to divorce are caused by ignorance, not malicious intent. Don't think that just because your split is amicable that problems can't occur. Taking precautions can protect BOTH of you. Order a credit report and review all outstanding debts.
More credit articles related to divorce:
Need more information? Read our financial and credit articles related to joint credit, and join our online financial newsletter. Bad Credit
Seeing your credit report can help you take control, when credit is less than perfect. Being able to improve it, begins with knowing what problems exist. It is estimated that millions of people have scores below 500 and about 25% of credit reports have a significant error. People who review their scores and reports often, are able to identify errors and correct them to maintain their credit history.
Being able to identify any information that is causing bad credit is a must for being able to repair credit. Checking all three credit scores and reports, and seeing all the recorded information can help with the process. Once you have the reports, go through the information carefully and look for problems like late payments. Consider calling those creditors and ask for a payment plan that works for you, this helps you avoid negative information from late payments. Payments must be paid in a timely manner.
It usually takes getting a hold on the family budget, and put a stop wasteful spending. This is often the only way to have more money to pay down bills. Another way is to go out and get a second or third job to get the money, and this can make for a tired lifestyle. One of the biggest areas that lowers scores, is reports of late or delinquent bills. Just starting on this problem can help repair scores.
A good do-it-yourself credit repair step is to decrease the amount of debt-to-credit ratio. This is important to maintain a good score. Another area to tackle is, not to make any changes on credit cards or bank accounts, or apply for too much credit all at once. It is good to be viewed by lenders as responsible or stable. Having too many inquiries on reports could raise some concern.
For people who are not able to rebuild credit, trying to do it their way, there are services that help people attempt to reach their financial goals. Some offer members affordable monitoring and access to the three major credit agencies. These companies help consumers understand their credit scores and reports, and some allow unlimited access to credit scores. They may provide tips and educational information about managing credit. There is plenty of information on the Internet, and credit products like cards to rebuild credit for people who need credit to repair credit. A healthy credit score can save money, when it comes to getting approved for loans with good interest rates and terms. |
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