By Evan Vitale
Divorce isn’t fun for anyone, but in the event of an unfortunate divorce, the last thing you probably have on your mind is protecting your credit.
Usually during marriage, one spouse will manage all of the finances (i.e., creating a budget, paying bills, making deposits, savings, etc.). However, during divorce, you want to separate all accounts. You’ll want to make sure whose name is on what account. If the account is joint, then both spouses have the responsibility of making sure the account is paid. Creditors don’t know what the agreement is on a joint credit card balance, nor do they care.
Unfortunately, a joint account usually will remain open and one spouse will run up a large bill. Even during a divorce, both spouses are responsible for the credit card balance. I’m sure we’ve all have friends on both sides of the fence here when it comes to one party running up a credit card balance and the other one feeling like they are suck with the balance.
If you have an individual account with an “authorized user,” then you will want to take immediate steps to remove the authorized user. As long as the “authorized” person is still on the account or credit card, they have the authority to use the card, etc.
In addition, you’ll want to dissolve any joint banking accounts. When cancelling a bank account be sure to do it together, the legal way. That way there won’t be a dispute on the balance at the time of the closing. You may also want to consider removing one of the spouses name, diving up the funds accordingly and leaving your funds in the account in order to keep the account (and any associated bank cards, automatic payments, etc. intact).
More on handing divorce credit in our next blog post!