Thursday, March 19, 2009

Protecting Your Credit When Getting Divorced

If you are going through a divorce, it is essential for you to take the steps necessary to keep your credit protected. Unfortunately, many people who go through a divorce think that they don’t have to worry about credit cards and other bills if the divorce decree states the other party is responsible for paying the bills. Depending upon the types of accounts you have, however, your credit can still suffer even if your divorce papers do not hold you responsible for repayment of the bills. Therefore, it is important for you to understand the different types of accounts you and your ex may hold and how these accounts are viewed by the companies you owe.

The Individual Account

After you get married, you and your spouse may continue to hold individual accounts. If you have an individual account, you are the only one who is responsible for repaying the debt. Therefore, if you and your spouse maintain only individual accounts, you don’t have to worry about whether or not your spouse pays off the bills. In some states, however, even individual accounts are considered to be part of your “community property,” which means you are both responsible for all of the debts incurred during the marriage. Currently, community property states include:

New Mexico

Unfortunately, if you do not have a job outside of the home or if you have a low income, you may not be able to qualify for an individual account. On the other hand, if you do open up an individual account and if you handle it responsibly, you don’t have to worry about anyone else being able hurt your credit score.

The Joint Account

As the name implies, a joint account is one that you share with someone else. In order to qualify for one of these accounts, the credit history, income and financial assets of both individuals are taken into consideration. As such, both people are also responsible for repaying the debt. Therefore, even if your divorce decree requires your ex to repay the debt, the lending institution can still come after you to repay the debt and your credit score can still be hurt if your ex fails to make the necessary payments.

Since you are still responsible for repayment of the debt on joint accounts, you should take steps to protect yourself when developing the divorce decree. For example, you can request that the joint accounts be converted to individual accounts or that your ex apply for a loan in his or her name in order to pay off the joint account. This way, you don’t have to worry about whether or not the debt is getting paid off in a timely manner.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for . For more info and to order your credit report with FREE credit score please visit

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