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Divorce and Credit: 6 Tips to Prevent Joint Accounts From Ruining Your Credit

Erik Pearson -- It's not usually the possibility of being taken to court, but the creditor's ability to lower our credit score that motivates us to pay. With joint accounts being the biggest problem in a divorce, here are the six tips to prevent them from ruining your credit.

Joint accounts are the biggest problem in a divorce. If the judge assigns an account and its debt to one side, then the other side is no longer legally responsible for the debt; however, since they originally agreed to pay, it can still be reported on their credit report. Keep in mind, it's not usually the possibility of being taken to court, but the creditor's ability to lower our credit score, that motivates us to pay. Here are the 6 tips to prevent joint accounts from ruining your credit:

1) A creditor is never required to turn joint accounts into an individual accounts. In most cases, creditors would rather have two people on the hook; instead, you should close (freeze) joint accounts to new charges as soon as possible. While this process doesn't remove the current debt, it keeps any new debt from being added.

2) With a divorce decree saying that you're not liable for the debt, you can sometimes negotiate to have your name removed from the account for less than the total amount. Don't rely on verbal agreements. Insist that they send you any agreements in writing. When you write to them, be sure that you send letters certified mail and keep copies of everything. This is particularly important because your spouse could declare bankruptcy. Once that happens, creditors may focus their efforts on trying to get the money from you; furthermore, since the joint account is still on your credit report, the bankruptcy could damage your credit.

3) You may be able to sue an ex-spouse if they fail to pay their debts. It's important to talk to your attorney about what's possible.

4) For home or car loans, you can either sell or refinance into one person's name. Don't simply deed the asset to the ex-spouse because it doesn't remove the debt. If you sign the deed or title away, then you still owe the money, but don't have any control over the house or car.

5) Utilities are usually not dealt with in a divorce decree. If the ex-spouse traditionally paid these bills, they might decide to stop. It's a good idea to start having utility bills sent to you as well.

6) Get your annual free credit reports to keep track of all your accounts so that you're not surprised.


Here are instructions to get your free Annual Credit Reports. Erik Pearson is a real estate agent serving Franklin, Brentwood, and Spring Hill, TN, and is the author of multiple articles covering a wide range of real estate topics. Please visit us at

© 2010 Erik Pearson

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