Dealing With Credit Card Debt When Getting a Divorce
NEW YORK (LowCards.com) -- Credit card debt is a factor to consider during a divorce. You aren't just separating your lives, but your finances as well. If you do this correctly, you can avoid a financial mess and go on with your life. If it is done incorrectly, you could have a financial disaster that ruins your credit and you will pay much more than lawyer fees.
Here are some credit card issues to address if you are going through a divorce:
1. Get a complete picture of your debt.
Get a copy of a credit reports from all three agencies for you and your spouse. Make a list of every open credit account and whether it is a joint or individual account. You may be surprised to find active accounts that you didn't know existed.
2. Close joint accounts.
Joint accounts are held by you and your spouse together, and both of you are equally responsible for the debt. The creditor reports account activity to the credit bureau in both of your names. This affects the personal credit score for both individuals.
Close all joint accounts and have your name removed from accounts that will continue to be used by your spouse. This will limit your responsibility for new debts from by your spouse (you will still be responsible for old debts incurred up until that point). If your spouse is an authorized users in any of your accounts, revoke the authorization. Send the request by certified mail. 4. Pay off the credit card debt before the divorce is final, even if you have to liquidate marital assets.
This will prevent the possibility of future financial problems. If your ex-spouse declares bankruptcy, then the credit card company will turn to you for full payment. 5. After the divorce is finalized, monitor your credit report to see if any errors or problems pop up from the joint credit you had during your marriage. More on the credit cards:
It's time to talk credit cards with your college-age kid
Handling debt after the death of a spouse
10 financial tips for newlyweds --By Bill Hardekopf Bill Hardekopf is chief executive of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook." Follow TheStreet on Twitter and become a fan on Facebook.
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