Far too many marriages end in divorce these days. Unfortunately the breakup of a marriage is not only an emotional struggle but it all too often has a hugely negative effect on your finances also.
Oftentimes there are people who have been responsible and reliable with their credit for years who end up with major problems following a divorce. Divorce is one of the main causes of problematic credit for many people.
Married people are often treated as equally responsible for repaying loans like mortgages, car payments and credit cards. During a divorce one person is usually assigned responsibility for the debt. However even though this is a decree from the court is it often overlooked and ignored by creditors, especially when the loan goes delinquent.
A credit report will not reflect a decree of divorce. If a payment is missed by the responsible spouse the creditors can and will attempt to collect from the other party. Not only that but they will report the delinquency on both spouses credit reports. If your ex-spouse is responsible but doesn?t pay, you will be held responsible.
Another problem is that since the household has split and you are now living elsewhere, you will not receive any notices so it is possible that you will not even be aware that there is a problem with these until they are seriously delinquent and they are already showing on your credit report.
Now having your credit report affected seems to be problem enough but if the ex-spouse decides to stop paying altogether and declare bankruptcy the remaining spouse can be held liable for the entire amount of the debt including late charges despite the court order. As the only remaining option available for collection the creditor will target the other person.
It is regrettable but at this time the credit system is very unfair to the parties of a divorce.
Often the only way to completely finalize a divorce is to declare bankruptcy. This is very unfortunate if there is one party who strives to be responsible and desperately wants to keep a clean credit record.
Divorce is just one example of why it is so critical that we have the right to repair our credit. Any item on a credit report, including a bankruptcy can be disputed if you will that it is inaccurate, misleading, incomplete, untimely, ambiguous, biased, unverifiable or unclear.