The interaction of credit and the maintenance of credit ratings can be substantially more complex inside a marriage. It is common for married couples in Florida to set up joint accounts with some lenders, and the liability for these accounts will often stay with the couple after they get a divorce. It may be wise to carefully review all financial arrangements and structure the divorce settlement properly, or serious impact to the credit rating and unfair liability for debt may result.
Any balance left outstanding on a joint account will be considered to be the responsibility of both divorcing parties. Although they may choose to close the account, or officially alter it so that only the name of one departing spouse is on it, both parties are liable for the debt until that occurs. It may be essential to maintain payments on a joint account throughout the divorce process so that the credit rating will not be effected. Once the joint account has become individual, it should no longer appear on the credit report of the spouse whose name has been removed.
It is also important to remember to change access to any individual accounts. If one of the partners set up an individual account in their own name and then added the other partner as an authorized user, then the account holder must be notified after the divorce to remove the now-unauthorized ex-spouse from the account.
The equitable division of assets and debts has many financial ramifications for the people getting divorced. An attorney’s assistance can be helpful to a client in negotiating a comprehensive settlement agreement that takes these and other matters into account for submission to the court for its approval.
Source: FindLaw, “Credit and Divorce”, accessed on Feb. 5, 2015