List Categories | List All Articles | List Articles By Title
Credit and Divorce
Mary and Bill recently divorced. Their divorce decree stated that Bill would pay the balances on their three joint credit card accounts. Months later, after Bill neglected to pay off these accounts, all three creditors contacted Mary for payment. She referred them to the divorce decree, insisting that she was not responsible for the accounts. The creditors correctly stated that they were not parties to the decree and that Mary was still legally responsible for paying off the couple's joint accounts. Mary later found out that the late payments appeared on her credit report.
If you've recently been through a divorce-or are contemplating one-you may want to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits-and pitfalls-of each.
There are two types of credit accounts: individual and joint. You can permit authorized persons to use the account with either. When you apply for credit-whether a charge card or a mortgage loan-you'll be asked to select one type.
Individual or Joint Account
Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any "authorized" user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.
Advantages/Disadvantages: If you're not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse's income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.
Joint Account: Your income, financial assets, and credit history-and your spouse's-are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).
Advantages/Disadvantages: An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don't pay them can hurt their ex-partner's credit histories on jointly-held accounts.
Account "Users" If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, a creditor who reports the credit history to a credit bureau must report it in your spouse's name as well as in yours (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of any other authorized user.
Advantages/Disadvantages: User accounts often are opened for convenience. They benefit people who might not qualify for credit on their own, such as students or homemakers. While these people may use the account, you-not they-are contractually liable for paying the debt.
If You Divorce If you're considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it's important to make regular payments so your credit record won't suffer. As long as there's an outstanding balance on a joint account, you and your spouse are responsible for it.
If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.
By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.
For More Information If you need additional help during this time of financial stress, please call Cindy Morus at 541-387-2995. She's been through it, too.
Cindy S. Morus (www.phelps-creek.com) is a Certified Financial Recovery Counselor specializing in showing women and their families how to achieve financial well-being and peace of mind. She is also a Certified Credit Report Reviewer and Get Clients NOW!? licensee. Contact her at 541-387-2995 or firstname.lastname@example.org She is also the publisher and editor of "Financial Fitness", an internet gazette dedicated to helping people improve their financial fitness no matter what decisions were made in the past.
Attention Ezine editors/Site owners: Feel free to reprint this article in its entirety in your ezine or website as long as you leave all links in place, do not alter the content and include our resource box as listed above. If you do use the material please send us a note (email@example.com) so we can take a look. Thanks.
Divorce Decision: Things To Consider When Making A Decision About Divorce
When making a divorce decision, there are quite a few things that you should consider. Too often people find themselves unable to clearly identify what they need to think about when making a divorce decision which leads to further indecision and frustration.
Divorce and Separation - A Child's Perspective
It is always the children that suffer the most when a marriage breaks down and separation or divorce is imminent. Children of divorcing parents often witness arguments even rows and this has a strong effect on any child.
Four Tips to Save You Money in a Divorce Case
1. Have an Clear Written Fee AgreementMost experienced and effective divorce attorneys charge by the hour and require an advance retainer (or deposit) that is paid at the beginning of the case.
Does Living In A Loveless Marriage Necessarily Mean That You Should Get A Divorce?
Being in a loveless marriage is a frustrating predicament, but it may not necessarily mean that a divorce is eminent. Solving the quandary of a loveless marriage requires self-reflection to assess the situation, courage to try to create a team effort for the best decision with your spouse, and gumption to face the reality that a divorce may be the best solution for the loveless marriage.
Too Many Divorces
My oldest boy asked me something the other day about all the news regarding the high divorce rate. I told him there aren't too many divorces, there's too many marriages.
Divorce and the Stock Market
The most recent statistics show that about 50% of all marriages end in divorce. It is not very encouraging to enter into any kind of relationship knowing that it only has a 50/50 chance of being successful.
3 Major Divorce Parenting Mistakes And Learn How To Avoid Them
What 3 major divorce parenting mistakes that surely lead to unhappy, unhealthy and unsuccessful children? Parents know these for your children seek.1.
Marriage - Divorce - Separation - How to Handle the Split Loyalties with Friends After Separation
We have all most probably encountered it at some stage in our lives - who do we stay friends with after a couple divorces or separates?The text book answer is to stay friends with both parties of course but that's a mighty tall order to fulfil as we are dealing with human emotions and judgemental attitudes here as well.Fortunately I think that most normal friends witnessing a couple of family splitting up can actually see both sides of the coin and actually do stay away from taking sides.
Spousal Emotional Abuse During Divorce--What You Can Do
Is your spouse violent, abusive, harassing? In cases of harassment or violence there are legal remedies and there are practical things you can and must do for yourself. This is not about reaching agreement--these are strategies for self-defense.
How To Protect Your Life Insurance Policy While Going Through A Divorce
Life insurance, more than most things you buy, relates to the circumstances of your life. You buy life insurance to protect your family from financial loss stemming from your death.
Stop Divorce: Should You Try To Stop Your Divorce If Youre Just Thinking About Getting A Divorce?
Thinking about getting a divorce doesn't necessarily mean that you should try to stop your divorce. Conversely, it could be wise to try to s top your divorce, only you know whether you should.
Divorce--The Five Obstacles to Agreement
This article and my articles "Overcoming Obstacles to Agreement" and "Negotiating Agreement" are about how to deal with disagreement--from simple difference of opinion to active upset and anger--and some specific steps that will help you reach an agreement. As you will see, the things you can do yourself are far more effective than anything a lawyer can do for you.
Divorce and Children: Things To Consider When Youre Staying Married Only For Your Children
All children are different and respond differently to divorce. Depending on the characteristics of the children - age, emotional maturity, happiness, resiliency to trauma - the easier or more difficult it will be for children to weather a divorce.
Avoid Lawyers! Do-It-Yourself Divorce Saved Me Tons of Money!
Let me preface this by saying right up front - this is NOT for everyone. The key is that my situation was friendly enough to still communicate with each other after we split.
Guide To Reducing The Cost Of Divorce
Seven Tips to help you keep more of your money at a time when you especially need it to support two households instead of one.Educate yourself.
Reasons You Arent Starting the Decision Making Process About Whether To Get a Divorce Or...
Stay MarriedAlong with any tough decision comes reluctance, especially when that decision involves an actual process and might potentially involve emotional pain or anguish. Deciding whether or not to get a divorce or stay married can be a frightening time for most people, even if they know deep inside themselves that they have to actually make a decision, one way or another.
Getting a Jewish Divorce in the UK
What is the Get?The Get is the Jewish form of divorce. The husband and wife must co-operate in obtaining the Get.
Dating Tips for Divorced and Widowed Moms
Dating is tough for just about everybody, but it's even tougher for people who are divorced and widowed. Along with the fears of being "out of practice," there are often children's feelings to consider.
Divorce--How the Legal System Works Against You
If there were no legal system, no lawyers and no courts, divorce would still be difficult and it would still take time to go through it. Divorce is at least a major crossroad in your life, maybe even a full-blown life crisis.
Five Christmas Survival Tips For The Divorced & Single Parent
For the over 50% of marriages that end in divorce, Christmas can be a hugely trying time.Since the season is one of the most stressful times of the year anyway, this onslaught of raw emotion to the divorcee can be overwhelming.
home | site map
All articles are copyright to their owners.
Note: this website lists articles, We do not Write Articles !