Divorce, illness and a long term disability are the most common life events that have a catastrophic effect on a person’s financial well being. All too frequently a person going through divorce watches as his/her credit rating is destroyed by the former spouse.
The Ask the Advisor Blog has some great tips for protecting your credit after divorce. Chief among his tips are:
1.Check Your Credit Score — By checking your credit score you can see if your credit has been adversely affected by your divorce. It will also show if there are any debts that you used to share with your spouse that are now being neglected. This will point you in the right direction when it comes time to cancel any joint accounts.
2.Separate/Cancel All Joint Accounts — Any and all accounts, debts and property that you still share should be separated, canceled or sold.
3.Notify Creditors of Your Divorce — Once you have separated/canceled all of your joint accounts/debts, you are no longer legally bound to your former spouse's current debts..
It is important to note that any agreement for the payment of debts between you and your spouse is not binding on your creditors. That means, until and unless the debt is transferred to the spouse that assumed the particular liability, the other spouse remains personally liable for the debt. So, if the debt is not transferred into your spouse’s name, it remains a joint obligation. If it is not paid, your remain liable to pay the debt.