If you have been through a divorce or are in the process of getting divorced, or contemplating one, you must look closely at the issues involving credit. The first steps towards understanding how divorce affects credit can help you to anticipate problems. Understanding the different kinds of credit accounts opened during a marriage can illuminate the potential benefits, and help to avoid the pitfalls, or both.

Individual accounts based only on your single income, assets and credit history are easier to protect after a divorce, as you alone are responsible for the debt. If your ex-spouse made charges on the account with your permission, you are responsible to repay the debt, even after a divorce.

Joint accounts are based on combined income, assets and credit history. No matter who was responsible for handling the bills and seeing that the payments were made, no matter if the court rules that one of the parties is responsible, or if one party is responsible for certain accounts while another is responsible for other accounts, both are legally responsible for the repayment of joint debt. It is a common mistake to accept the courts directions and think that the matter is closed. It is very important that both parties pay particular attention to the account that the other is “responsible” for. If bills are not paid on time or at all, both people will receive negative credit information on their credit reports and no amount of complaining and blaming will change anything. As long as there is an outstanding balance on an account held jointly, both you and your spouse are responsible.

Credit after divorce is one the most important steps towards independence. Credit Financial Planning, will assist in making the right choices. We will assure joint accounts are closed, and or converted to individual accounts. Our proven methods of restructuring new credit history for divorced people assures a positive up-to-date credit report based on an individuals finances, assets and credit history.