Billy Bob and Sue got a divorce. The decree stated that Billy was responsible for certain joint credit card obligations. So Sue went on with her life not worrying about the credit card debt that was awarded to Billy Bob. Six months later Sue gets a call from the creditors wanting their money for the credit cards she forgot about. Sue told the credit card companies that those debts were awarded to her husband in a divorce decree. The creditor stated that they were not involved in the decree and she was still legally obligated to pay the joint accounts. Sue later found out that late payments appeared on her once spotless credit report.
If you are going through a divorce or contemplating on going through one-you might want to take the time to understand credit and the issues that can arrive as a result of a divorce. Most attorneys don’t explain what could happen if the other party does not pay a bill on a account attached to your social security number.
There are two types of credit accounts.
• Joint Accounts
• Individual
If you are getting ready to apply for credit whether it’s a credit card or a mortgage loan you will be asked to state whether the account is joint or individual.
Joint Credit Accounts 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.
With divorce being a common problem these days make sure you get joint accounts that your spouse is responsible for out of your name. If you don’t it could affect you down the road if they decide not to pay the bill.
Author:Mike Clover
CreditScoreQuick.com
My divorce decree states my ex spouse is supposed to make mortgage payment on a house we had together jointly but now he lives in it but has not taken out a new mortgage to get my name off the old one and has since fell behind on the payments for six months and has ruined my otherwise great credit, if i produce a copy of this decree can this be removed from my credit report. Also he has negotiated with the lender to temporarily modify payments to make the lower for him to be able to pay, will this have any impact on my credit score as well.
Unfortunately you are still responsible for the mortgage as far as the lender is concerned. The divorce decree should have made him refinance the house out of your name before the divorce was finalized. This is a big problem during divorce. Now if he forecloses you will have a foreclosure on your credit report. Sorry…….
Unfortunately you are still responsible for the mortgage as far as the lender is concerned. The divorce decree should have made him refinance the house out of your name before the divorce was finalized. This is a big problem during divorce. Now if he forecloses you will have a foreclosure on your credit report. Sorry…….