Credit Cards and Divorce

by : Sharon

Divorce might be a very painful process and money issue often makes it even more unpleasant. You need to divide both assets and liabilities. The situation can be especially complicated if you have joint credit card accounts or your spouse is an authorized user on your account. You need to know the law to make sure your interests are defended.
First of all, you need to understand what a joint account is. A joint credit card account means that both you and your spouse are equally responsible for all the transactions and payments. It is a good option for a married couple in a situation when one of you does not have too much of a credit history or a strong income and can not qualify for a good credit card deal. When considering applicants for joint accounts creditors check credit reports of both family members. If you will be late with your payments the information will be reported to credit bureaus in both names.
If your marriage has fallen apart and you are getting divorced do not forget that both of you are responsible of making the payments. According to the law, your bank cannot close your joint account just because you are divorced. Your ex-partner or you need to request the bank to do it. However, the creditor has the right to ask you to reapply for a credit card deal on an individual basis. Thus the credit-issuing company checks your individual creditworthiness.
If the credit card is opened in your name and your spouse is an authorized user. Although credit information might be reported to credit bureaus in the user's name you alone are responsible for payments. So if you are getting separated make sure you have enough income to make at least minimum payments.
If you and spouse have separate credit card accounts usually you won't have problems dividing responsibilities. However if you are lucky to live in a community property state you might be held responsible for any debts incurred during marriage. Moreover, your spouse's debt may affect your credit score.
The best way to clinch the matter is to get the divorce decree that will state who is responsible for what credit cards. Make sure you discuss the issue with the bank because your creditors are not parties to the decree. If you have joint accounts you might still be held liable.
If you act according to the law you should not have a problem separating your financial responsibilities. However, you need to pay special attention to your credit report and make sure everything is correct. If the bank charges you for late payments your spouse is responsible for you should immediately contact its representative. If the creditor does not want do anything and keeps billing you the best way would be to get a lawyer and file a complaint.
Of course, it is hard to be clearheaded when you are in love but if you have decided to get married do not forget about the possibility of a divorce. So, if you and your spouse have found a credit card deal that you want to apply for carefully consider all the possible types of credit card accounts.