Credit, Bankruptcy and Divorce
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Prepare financially before divorce.
The issues of credit and bankruptcy are often directly responsible for divorce. Credit and money-related problems often involved with divorce used to primarily affect women, however these days many men are confronting those issues due to number of women who are pursuing successful careers or starting businesses.
Therefore some women are now the primary wage earner in the family which means that for some families the wife instead of the husband whose income qualifies the couple for joint credit. However should a woman's businesses fail it could create financial problems for their spouse or even ex-spouse!
If you are married and your spouse declares bankruptcy your lawyer may advise you to file for joint bankruptcy especially in a community-property state. Joint bankruptcy will wipe the slate clean for both parties because otherwise when the bankruptcy gets your spouse / ex-spouse off the hook for any joint-debt, creditors can pursue you to collect outstanding amounts.
Of course each situation is different and subject to local laws. To protect yourself it is wise to retain a competent bankruptcy lawyer to find out what your particular situation requires. Some people avoid facing the facts and do themselves permanent financial harm by delaying an unavoidable bankruptcy. If you face up to the reality early that a bankruptcy is inevitable, tackle it straight on and without delay.
For those considering divorce it is wise to address certain financial issues prior to commencing divorce proceedings to minimize potential problems or damage. For both your sakes cooperating with each other on these measures will result in far less stress and expense once divorce filings are underway. Below are some initial steps you can take:
- Establish good credit and a bank account separate from your spouse. If you currently do not have these intact, delay divorce proceedings until you can do so in your own name.
- Eliminate all shared obligations and credit debts with joint funds to ensure they do not become your personal responsibility / obligation after the divorce
- If you already have either joint or individual credit, obtain a 3 in 1 credit report and deal with any problems indicated on the reports.
- Where there are joint accounts in your credit file that show negative information (if the problem is the fault of your spouse or due to circumstances beyond your control) prepare a written explanation detailing the reason(s) for it. Instruct the credit bureau to make this document a permanent part of your credit history to help disassociate you from the derogatory information.
Its a shame when a couple finds themselves confronting this difficult and emotionally draining process. Sometimes there's nothing that would have avoided it but often it may have been averted if the couple had known more about how to avoid marital money problems to begin with!
For more information Increasing Your Credit Score, or to choose from a variety of related products
and services, choose from the following:
Reports | Monitoring | Credit Scores | 3-in-1 | Debt Help
Last Updated: 08-Apr-2006
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