Personal finances following a divorce should be discussed with your divorce attorney when determining the division of property and debts. It is possible for a credit score to be saved (or ruined) depending upon what an ex-spouse might do with a joint account from the marriage. Even if a divorce decree says one spouse is responsible for a debt, if the other spouse previously was on that account, they may be held accountable for payment if the ex does not pay.
Responsibility for debt is something that should be dealt with prior to obtaining the divorce. This is when the attorney and/or a financial professional can be very helpful to a couple. It may be best if the party that wants to take responsibility for a debt obtain a new loan in just their name, and pay off that old debt with those loan proceeds. This is one sure way to relieve the other spouse from debt responsibility.
Managing debt obligations prior to the divorce decree is an important task that may be clouded by poor credit ratings that could make renegotiations or obtaining new loans difficult or impossible. The debtor wants payment no matter who the decree says should be responsible. If your name is on a debt, you are going to be ultimately responsible for seeing that debt is paid in full.
Don’t trust debts to a piece of paper; deal with bills and marital financial obligations as part of your dissolution of marriage. The only way to get your name off a debt is to pay it in full and then close the account or renegotiate the debt to get your name removed. Seek the advice of your divorce attorney to assure that all parties live up to their agreements and to protect your credit score.
Life after divorce can be a time of uncertainty. Sure, it is a positive beginning, but take all the steps that you possibly can to get to the positive by addressing debt and building up your own strong credit score.
Source
Fox Business: “Square One: How to Build Credit After Divorce,” Lynette Khalfani-Cox, Jan. 25, 2012
