Divorce and Credit Cards

Divorce and credit cards are like oil and water, they do not mix.
 

   
Although getting a divorce is difficult, paying for joint credit cards after the divorce could prove to be more stressful. This is because both partners can be held liable for any debt incurred by a joint credit card pre and post divorce if it is not addressed properly. Divorce and credit cards can put the credit rating of both parties in jeopardy even if it is completely the fault of just one of them. So, what is the proper way of dealing with divorce and credit cards?

Divorce and credit cards: Before the divorce
When a couple decides to split, the rule of thumb is to leave it try to leave each other without any joint debt. Why? Because credit card companies do not honor divorce agreements or stipulations. All they care about is collecting money from any or both of the parties. Since both are co-signers of the credit card, both are held responsible for it. So, what do you do? If you can’t afford a divorce attorney, try to seek the help of a mediator or a financial planner. A third party will give an objective view of how to properly divide the debt and the best thing to do about it, whether to pay it in full or to transfer it to the couple’s individual credit card accounts. If the problem with divorce and credit cards is solved here, the only thing left to do is to cancel the joint credit card account. However, if the debt isn’t resolved, you might as well put in black and white during the divorce agreement.

Divorce and credit cards: During the divorce
There are certain stipulations that a divorce attorney can add to a divorce agreement to solve the problem with divorce and credit cards. First, they can assign each spouse equal responsibility for their credit card debt. The best way to do this is to gather all credit reports so that couples will know every credit card that they can potentially have problems with. When one spouse decides to continue using a joint account, the other should make it a point to remove his name from the account in order to remove his responsibility for incurred debts post-divorce.

To deal with divorce and credit cards properly, lawyers should draw up divorce judgments that include a deadline by which all debts assigned to each party will be paid in full, and give a plan B in case the deadline is not meant. The judgment should also include a clause which prevents one party from shifting any liability to the other party when s/he is the one responsible for the debt. The spouse who incurred the debt should also be obliged to pay for any losses that the other spouse may have suffered. If one spouse should declare bankruptcy prior to paying off a credit card debt, the other should be protected from collectors.

Divorce and credit cards are difficult to deal with. The easiest thing to do in order to prevent future problems from happening is to make a plan on your own by paying for the debt and closing the account or transferring remaining balances to your own account prior to the divorce.


  

Source: Credit Cards For People With Bad Credit Rating


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