How Divorce Can Damage your Credit Report
Divorce can be rough. You can divide assets easy enough but liabilities can be tricky, especially joint liabilities.
Joint Liabilities may not get serviced.
For example, husband and wife jointly have a credit card that carries a $10,000 balance. The court may order the husband, as part of the divorce to assume sole liability for that debt. But what if he fails to make those payments? The wife’s credit gets hammered, too. While during the divorce, there are far more important considerations such as alimony and child support to consider, the credit worthiness of a soon to be ex-spouse cannot be ignored.
Ex Spouse may open new accounts in your name.
It happens. This is actually identity theft. Indeed, much identity theft occurs between family members. Sometimes an ex spouse may open an account in your name. When this happens, you have to take the very same actions that anyone else who has had their identity stolen. Get a police report and start notifying the creditors.
Divorce Decrees do NOT affect your liability to the lender.
Many people believe that when joint debts get split up, that the non responsible spouse is, well…no longer responsible for the debt. That’s just not so. The court can only make one of the parties responsible for paying the debt. However, as far as the bank is concerned, it still has both of you on the hook.