Vision Credit Education, Inc.

Divorce is painful enough. The emotional drain on spouses and children can impact their work and even their sleep. Financial turmoil can often result with changes in income, expenses and with trying to pay off legal bills. This may be just the tip of the iceberg.

Credit Strain

Many cardholders that experience a divorce can tell you that they had trouble making their minimum payments on credit cards and other loans. Often, the money they have to live on does not go far enough to cover these preexisting debts.

The results can include late payments, delinquency fees and default. Many divorcees end up filing for bankruptcy protection because they cannot handle their new financial situation.

As long as the cards are solely in your name, then at least you have some control over your destiny. However, not all credit cards are solely in the name of one spouse.

What if the Card is in Your Spouse’s Name?

If a credit card or loan is in your name, then you need to understand that in the eyes of the law, you are ultimately responsible for repayment of that debt. This fact does not always coincide with the ruling of a divorce judge, since they focus more on splitting assets and debts equally.

If your ex-spouse is in charge of repaying a debt that is in your name, then you are exposed to a serious credit risk. If they are unable or choose not to repay the debt, or even simply make late payments, then your credit can be ruined.

Sometimes the ex-spouse cannot afford the payments. Other times, they fail to honor their financial responsibilities out of spite, knowing that it could affect you in a negative manner.

How to Protect Your Credit

When coming to an agreement over financial responsibilities, find a solution that keeps you in charge of your debts. It may be better to receive cash payments so that you can repay a debt in your name. Otherwise, you cannot always count on the other spouse to make those payments.

If you hold a joint account, talk with the lender about removing your name from the account. As long as your ex-spouse has reasonable credit, your request has a better chance of being granted. If a joint account has a zero balance, then this can be easily granted.

Make sure that your attorney and the judge or mediator understands the importance of being able to control your credit moving forward. Otherwise, the costs of divorce can be far greater than you ever realized.

You could have trouble getting approved for a new apartment or home purchase. That next job opportunity may dissolve due to a poor credit check.

The results can be devastating, and the damage can occur in as little as 1 month. It could take up to 7 years or more to repair the damage done from a messy divorce. Remember that despite what the divorce decree states regarding the repayment of marital debt, you can be sued by a lender for nonpayment of a debt in your name!