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How do you handle credit card accounts during a divorce?


Scott Rudolph, CPA Accountant Mediator
©Copyright 2013

First, it is important to cancel all joint accounts immediately once you know you are going to obtain a divorce.

Creditors have the right to seek payment from either party on a joint credit card or other credit account, no matter which party actually incurred the bill. If you allow your name to remain on joint accounts with your ex-spouse, you are also responsible for the bills.

Your divorce agreement may specify which one of you pays the bills. As far as the creditor is concerned, however, both you and your spouse remain responsible if the joint accounts remain open. The creditor will try to collect the bill from whoever it thinks may be able to pay, and at the same time report the late payments to the credit bureaus under both names. Your credit history could be damaged because of the co-signer's irresponsibility.

Some credit contracts require that you immediately pay the outstanding balance in full if you close an account. If so, try to get the creditor to have the balance transferred to separate accounts.


ABOUT THE AUTHOR
Mr. Rudolph, a member of the mediation team at Alpha Center for Divorce Mediation, is a licensed Certified Public Accountant in Pennsylvania who specializes in providing tax planning and preparation services for divorcing couples, small business owners and individuals. or View our website



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