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Facts about joint credit card debt after divorce. A divorce decree may declare which spouse pays credit card bills, but divorcing does not relieve either party. Maybe credit counseling or debt settlement is right for you. 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. Settle joint credit card debt
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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.
Read our article about joint debt.
More marriage and divorce credit articles for: joint mortgage loan joint auto loan joint credit cards
Tips to Payoff Bills: To get started on paying off bills, figure how much extra can be spared every month toward paying off a debt with the highest interest first. However, some consumers like to start with the smaller, high interest accounts. This can give more positive reinforcement as at least one small debt may get paid off faster. The benefit either way it to eliminate high interest debts and save money by eliminating added fees. The money that is saved, can then be used toward other debts.
It can be best to stay with one bill until it is paid off, rather than trying to spread around any extra money to several bills at the same time. Once a targeted account is paid in full, begin on the next account on the payoff list. This can help keep a consumer focused and living within a budget. Do not let up until all debts are paid off. Below are a few helpful steps for paying off bills:
*Create a budget *Work on building an emergency fund *Decide which accounts to payoff first *Track all spending to determine wastefulness *Review and adjust the budget frequently *Cut out wasteful spending to have more money for bills
One important factor in becoming successful with paying down debt, is to have a budget and control spending, along with knowing where the money goes. By tracking expenses, it is easy to determine wasteful spending. If this does not work over time, consider the help of a professional. Some consumers are able to get their finances back on track, while others must hire a professional to help them set goals. Waiting until debts are out of control, only makes getting out of debt harder and can take longer to accomplish.
Here are some possible warning signs that debts are getting out of control:
*Charge card balances are getting higher *Only the minimum or less is paid on account balances *Debts are being shuffled from paycheck to paycheck *Constantly applying for more charge cards *Credit card balances are at or over the credit limits *Constantly charging more on cards than is paid on them each month *Having problems keeping up with bill payments *Don't know how much is owed and don't want to know *Getting phone calls or letters about delinquent bill payments *Using credit cards for basic purchases like food *Using credit cards because there is no money *Using a savings or an IRA to pay monthly bills *Hiding financial problems from a spouse or partner *Constantly applying for credit card offers sent through the mail
The signs above can be a warning that financial trouble is real. The worst thing to do, is to do nothing. There are ways to get out of or manage debts, but getting out of debt certainly must not be put off or brushed aside. For many consumers it takes a professional to help point out problem areas or possible solutions for getting a hold on debts. Many companies offer a free consultation and a quote. Why let bills stack up with added high late fees or interest rates when it is easy to get quotes online, in a matter of hours. It could make life less stressful once debts are tackled. Review Disclaimer:
Review information was gleaned from the website, and is neither an endorsement by us nor an confirmation of content nor a warranty of any promises made by the website. Use the review information at your sole discretion and sole liability.
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