Most people would agree that dealing with property division and other financial elements make a divorce quite complex. There are many reasons for this, such as commingling funds into joint accounts. Credit accounts in particular can really complicate the property division process. If the couple is not well prepared, liability for these credit accounts can pass on unbeknownst to one or the other spouse.
For example, say a divorce decree specifies which spouse will be responsible for paying the balance on the couple’s joint credit card accounts. If the spouse fails to pay the account, the creditors will likely contact the other spouse demanding payment. When any account is jointly owned, final responsibility for making payments will fall to both spouses.
How can divorcing couples avoid the unexpected effects divorce can have on credit? The answer lies in preparation. When divorce makes its way into a couple’s life, finances should be among the first topics addressed. The couple can take steps to turn joint credit card and other shared accounts into individually owned accounts. This will minimize the risk for the spouse who is not responsible for the debts according to the divorce settlement.
Another important consideration is removing spouses who have been authorized as a user on individually held credit accounts. This simply means that the individual account holder should contact the creditor and have his or her spouse removed as an account user.
Taking these steps early in the divorce process can protect both spouses and preserve the credit scores they have carefully built. When divorce is further complicated by a high net worth or multiple credit accounts, an attorney in Broward County can help the couple prepare for the financial aspects of divorce.
Source: FindLaw, “Credit and Divorce,” accessed Sep. 16, 2015