Credit Considerations in Divorce Suit

Credit Considerations in Divorce Suit

Credit Report

The time of beginning of a divorce is an emotional and confusing, it is also the most important time to look into the matter and discuss your credit situation with your lawyer. At that moment look at your mortgage, equity lines of credit. Your joint credit cards or any other credit that you or your spouse may have. Your lawyer will be the best person to help you to make a plan for these accounts, however, below are a few informational facts that can will help you start to understand your situation.

Joint Accounts:

A joint account is a thing that you both spouse have signed and both have responsibility. The most obvious might be a mortgage of house, but there are others aspects that you might not have considered. If a credit account is in your names, you are legally responsible to pay it back to the issuing authority. Before you start your divorce process, it is very wise to cancel all joint accounts so that your spouse will not be able to run up debt that you might end up being responsible for. 

Individual Accounts:

There may have various other credit accounts that are not considered joint accounts. One of these is for instance a credit card, that is opened by your name and have made your spouse a user of it. This is definitely not a joint account and if your spouse decides to use credit card and starts charging on it, you will be responsible for the debt. It will be a wise idea to close all of these accounts before heading to process, open accounts in your name only and never allow anyone else to use those account. 

Marital Debt:

It is a debt that you both have taken during the marriage process and that will usually divided in the equitable distribution that your lawyer will explain. However, the important thing is that it is no longer considered as marital debt. In community property states, it will be when the divorce is final. In other states of America it will be when that state declare that you both have separated legally. You need to discuss this with your lawyer, ask him how it applies to you in your particular state as anything before that date is considered marital debt.

Bankruptcy:

There is a common question of what happens to one party? if the other one party files for bankruptcy, particularly a Chapter 7. If the bankruptcy is granted by court then the claimant that filed case will be free of the debts and the creditors will look over the other party to pay, if there is a joint account. If the federal court has made this decision, the other party may have claim to be bankrupt himself. If you carry a large amount of debt it might be beneficial to for you both to file a joint bankruptcy prior to the divorce.

Credit Rating:

Credit

You and your spouse both want to have a good credit rating to start accumulating individual credit after the divorce. The first move towards, you can make is to check what you is your credit rating right now. You are allowed to get one free report a year from the three foremost credit reporting agencies. The place to start is on several websites available on internet. A divorce does not have to have an adverse effect on your credit rating, but it certainly can happen without care.