Credit Reports, Marriage and Divorce
Marriage:
Many people believe that when they get married or even live common law with a partner that their credit reports merge together and there is now only one credit report for the couple. In fact, each person continues to have his own credit report based on their individual history.
Problems usually arise when one of the partners in a marriage asks the other to guarantee or otherwise co-sign a debt. This now becomes a joint obligation of both partners. If payments are late or not made at all, this information shows up on both credit reports. The result is the bad information reduces the credit score of the spouse who has a good credit record.
Divorce:
Just as when you got married, there was no merging of your credit reports, so it is when you separate and divorce. Good or bad, your credit report is yours alone. The problem on separation and divorce is that you might have co-signed a loan, had a joint loan, had a spousal (supplementary) credit card while you were together, etc., all of which will effect your credit report if your ex-spouse does not pay the debt in full after you split.
If you are in the process of separating, or even thinking of it, a little advance planning should be considered. First, find out which of your partner’s debts you are responsible for. Obtaining a copy of your own credit report may be helpful in determining this. Encourage your partner to pay off those debts that you are responsible for, before they pay their own individual debts. If possible, have them transfer the “joint” debt to a debt that you are not responsible for. A transfer of a joint debt of a high interest rate credit card to a low interest rate individual credit card may be possible without arousing any suspicions. The end result is that you will protect your own credit report.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form, to learn more please visit our YouTube. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.