Credit Card Debt And Divorce, How Will It Affect You?

 

Credit card debt and divorce, probably the top two life changing, stress producing events, when mixed together are enough to send just about anyone over the edge. If you find yourself going through this combination how can you minimize the damage to yourself, your spouse and your children?

Any Hidden Debt?

First things first, pull credit reports for both parties; see if there is any hidden debt unknown to either party. Hidden debt is a huge contributor to divorce in the first place; it needn’t be a wrench in the works for the divorce.

Split Up The Debt If Need Be?

Split up any joint debt, cancel joint accounts. Make sure both parties are responsible for their share of the debt. Also be wary of either spouse running up last minute debts out of spite, make sure to cancel the joint accounts pronto!

Protect Yourself In The Case Of Default

You will want to add a clause to make sure you are not responsible for your spouse’s debt in the event of default. This clause would include things like court costs and lawyers fees.

Do You Need To Take Out A Consolidation Loan?

Another thing to consider after the divorce is final is to take out a consolidation loan to pay off all credit card debt. This will lower your interest rate, and help to rebuild any bad changes to your credit history.

Credit card debt and divorce is a volatile mix that has the potential to ruin anyone’s life. Good preparation can at least lessen the stress somewhat, and give the parties involved a better chance of moving on with their lives easier.