When Your Marriage Ends, Your Credit Concerns Are Just Beginning

It’s over. The wine has turned to vinegar; the roses are molding in the compost bin. In the words of would-be social scientist and observer of the human condition B.B. King, “The thrill is gone.”

Your marriage is coming to an end.

While you may feel like barricading yourself in the snack aisle of your local convenience store for six months and letting the world go by, right now is actually the time when you need to be especially hands-on and involved, especially when it comes to your credit.

Unless you take appropriate steps, your ex’s bad credit may also become yours, tanking your credit rating even though you’re out of each other’s life. What’s more, even if your divorce decree states that certain joint debts are your ex’s responsibility, a creditor will come at both of you with equal gusto.

To avoid the two-headed monster of bad credit after a divorce, here are some steps you can take:

Refinance or pay off all joint debts. This is really the crux of the biscuit. The point is, any joint accounts need to be closed somehow so neither party is affected by the other’s mishandling of payments. Ideally, once you’ve both determined who is responsible for what debts, any accounts held jointly can be refinanced in the name of the person responsible.

But what if one of you can’t qualify for a refinanced loan — say, a car loan or mortgage? In that case, you might consider simply selling the property in question. True, this might introduce new challenges, but at least you’d be protecting your credit, plus you may be able to use the proceeds to pay off other joint debts.

If you’re still finalizing your divorce, it would also be wise to specify in your divorce papers that all joint debts must be paid off by a certain date, so appropriate legal action can be taken in the case of noncompliance. Also, if you’re especially concerned about your ex’s follow-through abilities, take on the payoff chores yourself, or require proof of payment.

Remove yourself from other accounts. If you are an authorized user on any of your ex’s accounts, ask the creditor to remove your name from them. Sometimes only the account holder can do this, in which case you may need your ex to contact the creditor.

Monitor and maintain your credit report. This should be your post-divorce mantra for at least a year. You can get a free credit report every 12 months. Look for any faulty information — addresses or accounts of your ex’s, for instance — and dispute it with the bureaus until it’s fixed. If your ex makes payments on any joint accounts, make sure they’re being paid on time. And be vigilant about new accounts — in a worst-case scenario, an ex who can’t qualify alone on a loan may attempt to use your information in order to obtain credit.

While dealing with banks and creditors may be the last thing you want to do right now, the payoff is undeniable. File it under “an ounce of prevention.” After all, it’s time to get on with your life. Protecting your creditworthiness will allow you to do just that.

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