It is in your best interest to make sure that your credit and good name are protected before, during and after divorce. By taking a few precautionary steps, and having a solid understanding of the way your accounts work, before the divorce begins will mean that a recent divorcee wont have quite so many pieces to pick up after the divorce is over.Plan ahead and nip any chance of damage to your credit in the bud, before it gets serious.
Understanding Your Accounts There are two main types of accounts. These are called individual and joint and we will address them in detail in the course of this article. One person owns an individual account and, in order to have the account, that person’s income, assets and credit file are used as a decider of whether the person is eligible. The lending institution does not factor the possibility of a partner into the person’s financial obligations or assets when deciding to give an applicant an individual credit account. What this essentially means is that the person who owns the account is responsible for the payment of the account, not a second party. This individual account will be noted in your credit history and never in your partners if they are not the holder of the individual account. Always research the situation because this is where things can get tricky. If you live in a community property state, all debts, regardless of their type, are included as joint responsibility while two people are married. This means that if you are married and your partner has an individual account on which a large debt is owed, even though you are not responsible for the debt, it becomes your responsibility anyway.