Credit and Divorce

If you have gone through, or are considering a divorce, take a close look at the issues involving your credit. Pay attention to the status of your credit accounts. If you maintained joint accounts during your marriage, it is important to continue to pay the regular required payments. As long as there is an outstanding balance on your joint account, both you and your spouse are responsible for payment. Generally, any debt incurred by your spouse is also your responsibility, regardless of whose name is on the account.

If you are contemplating separation or divorce, you may wish to contact your creditors in writing to ask that they close your joint accounts (or accounts where your spouse is an authorized user). The creditor cannot close a joint account because of a change in marital status, but they may close a joint account at either spouse's written request. The creditor does not have to change a joint account to an individual account, and may ask you to reapply for a credit account as an individual and then, on the basis of your application, extend or deny you credit.

You may wish to contact an attorney regarding these issues to ensure everything is done properly.

Consider the following:
Jill and Bob were recently divorced. The court decree stated Bob would pay the balances on their joint credit card accounts. For whatever reason, Bob did not pay on the accounts and the creditors began contacting Jill for payment. Jill told the creditors that the court had ordered her ex-spouse pay the debts, and she insisted they contact Bob. The creditors told Jill that the agreement they entered into with the couple obligated both Jill and Bob to repay. They also told Jill that they were not a party to the court decree agreement, and therefore do not have to attempt to collect only from Bob and that she was still legally obligated to repay the debt.

The above scenario is accurate.

Because a valid contract binds the parties who sign, it does not matter if one of the parties chooses not to repay or a divorce decree stipulates that one party must pay. The contract is still binding regardless of a divorce decree. Either party can be contacted for repayment, and both parties' credit history can be affected by the debt. Either or both parties may be sued for repayment of the debt, and either or both parties' wages may be garnished after a judgment is obtained. If one spouse ignores a court order to pay a certain debt or debts, it is the responsibility of the other spouse to inform the court that the court order is being ignored. The court may take further action against the party for noncompliance of the court order.

Can my credit history before marriage be reported on my spouse's credit history?
No. Only obligations that arose during you and your spouse's marriage can be reported on both credit histories. Can a debt that the court ordered my ex-spouse to pay be reported on my credit history? Yes. As explained above, the creditor can hold you responsible for repayment of a debt incurred while you were legally married or jointly signed a contract, regardless of any court order. The presence of a poor payment history on the part of either spouse while married can impair either spouse's ability to obtain individual credit, even after a divorce.