Divorced – But Your Credit Still Shares a Bed

“To have and to hold, from this day forward, for better or for worse, for richer or for poorer, in sickness and in health, till death do us part.”  Most of us will recognize this at the traditional Marriage Vow.

“Tell me the words I never said; show me the tears you never shed.  Give me the touch, that one you promised to be mine. Or has it vanished for all time?  I let you go, I let you fly.  Why do I keep on asking why?”  This is the Broken Vow sung by Josh Groban.

Divorce is a tough life event to go through.  It is the end-all for marriage but is it the end-all for everything?  It may signal the end of romance but it will probably not signal the end for credit ties.  It causes emotional distress and worse, financial anxiety.  Where marriage ends, financial and credit setbacks begin!

Divorce Hurting the Credit Rating

Divorce costs you financially.  It will take its toll on you sooner than you know.  Generally, men take care of the tasks pertaining to conjugal assets and liabilities.  In other words, it is usual practice for the husband to pay home and car loan payments, apply for loans, file income tax returns, etc; the money may come from both parties, but financial decisions have traditionally been the province of men.  Of course, that was before the reality of divorce ‘became very real,” so to speak.  Today, women should keep their own handle on their own financial affairs; otherwise, they’d be lost after the divorce.

A divorce dissolves a marriage; however, when it comes to joint financial obligations, the decree only remarks on who is responsible for accounts opened during marriage.  In other words, contracts entered into with creditors stand even after the decree has been handed down .

If the designated spouse fails to pay the bills and no change has been made in the lending contract then missed payments will reflect on both of your credit reports, thereby creating negative impacts on individual credit scores.  In that case, you will have to take responsibility for the ex-spouse’s inability to pay the dues.  Collection agents will become your phone pals.  Demand payment letters will replace the usual love letters.  Headaches will become a substitute for heart-pumping romance.  Your credit score will drop while your late payments pile up.

If you don’t want to fall into this after-divorce trap, you should do all you can to avoid all possible pitfalls.

Let Your Credit Records Divorce

The best thing to do after divorce is to peruse all your financial records.  You have to pay special attention to loans, credit card accounts, bank accounts, etc which you or your spouse has procured within marriage.  Pay attention, too, to those which you have jointly accomplished with your ex-spouse.  Check the agreements (especially the fine print and supplementary documentation) for each and see if there are clauses that name you as co-borrower and guarantor, especially ones that state you will be responsible for your ex-spouse’s dues.  If you find such terms, you should consult your lawyer and have such terms updated to reflect your currently divorced state.  Leave no stone unturned in your research.

Even after you are satisfied that everything is in order, you should not rest easy.  You should get a copy of your credit report and monitor your credit rating regularly.  Make sure that there are no erroneous reports on your record and that no trace of the ex-spouse’s financial responsibilities and accounts is on it.  Should there be need for any correction, inform the credit bureau and the financial institution concerned.  Then go back to being vigilant.

Divorce is no cut-and-dry process.  It leaves many loose ends that need tying up, or as Maroon 5 puts it in This Love, “I’ll fix these broken things, repair the (sic) broken wings, and make sure everything’s alright.”

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