Four steps to take with consumer debt

when you divorce

Divorce is traumatic, but having to worry about who is going to pay for credit card debt can make it worse. Here are some tips to help make sure that you don’t end up with bad credit after you end your marriage. Good credit is important because a loan for a home or car when you have bad credit can be difficult to obtain.

First, know the facts. Before you sign a divorce decree, know what bills you have, the amounts you owe on any loans. Also record if the loans are in your name, your spouse’s name or are a joint account.

Meet with your spouse and determine what joint accounts can be closed. The more accounts you can close the better. Even after you are divorced, you can still be held responsible for debts your ex-spouse ran up during the marriage, even if you were separated or your spouse agreed to pay the loans as part of the settlement. This can ruin your credit.

After the divorce is final, be sure to check your credit report and consider debt consolidation financing if you can’t at least pay your minimum monthly payments. Be sure to contact all three credit agencies, Experian, Equifax and TransUnion. These bureaus collect account and payment information from all off your creditors. Be sure to review each report carefully to make sure that no negative reports related to your ex-spouse’s credit remain on your report. If there are, write to the credit bureaus and ask them to remove the bad credit information.

Be sure to re-establish credit in your own name, and to pay your bills on time, every time. Consistent, on-time payment will increase your credit score and put you on the path to financial stability in your new life.

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