Caution: You Can’t Divorce Your Debt
You’re out of it – home free – right?
No, wrong. If you both signed the application forms for credit cards, if you both signed for the purchase of that car, or installation of that TV satellite, or that home mortgage, you’re both on the contract and you’re both liable.
Credit issuers don’t care what a judge says about who is responsible. When you signed the application or the agreement, they treated you as an individual person, and they still consider you an individual person – one who owes them money.
If the judge decreed that one of you must pay a debt and you don’t do it, the other can haul you back into court for more proceedings. But in the meantime, the creditors want to be paid. When they aren’t paid, the report goes to the credit bureaus, and both you and your spouse will see your credit scores decline.
So what can you do? If you can deal with each other in a civil manner, you can divide your debt. You can each get new credit cards, in your name only, and transfer the appropriate portion of your old balances to your new cards.
If you were listed only as an authorized user, your spouse’s debt will not be your responsibility, but it will still show up on your credit report. If that’s the case, ask your spouse to remove your name. If he or she does not, and it shows up on your credit report anyway, you can contact the credit bureaus and let them know that this is not your account. You’ll probably have to file a dispute, but you can get it off your report.
Because you are responsible for any accounts you hold jointly with anyone – be it your spouse, your child, your sibling, your parent, or even a friend – you should think twice before entering such an agreement.
And, if you are about to marry a person whose outlook on financial responsibility is different from your own, you should take care not to be added as a joint card holder, or even an authorized user. Get your own cards, in your own name. Consider these same consequences when you decide to purchase a car or a home.
As long as you don’t mix your finances, one of you can still maintain a good credit rating, even if the other does not. That could be beneficial to you as a couple – and will definitely be beneficial should you divorce.
