How To Protect Your Credit Score During Divorce: Factoring In Joint Debt

Are you getting divorced but still have joint debt? Remember, you’re getting divorced from your spouse not your lenders!

How you manage joint debt during and after divorce will directly impact your credit score. According to Investopedia, the term joint debt refers to any type of credit facility that is issued to two or more people (such as a married couple) based on their combined incomes, assets, and credit histories.

The parties involved in a joint debt share everything about the debt including the credit limit and the responsibility to repay it back to the lender. This means if not managed properly, it is possible that former partners may still affect one another's credit, even if the two are divorced. How you handle any joint accounts with your former spouse can have an effect on both your credit report and theirs.

Mutual debt can impair future financing because both sides are impacted even though only one side might be making payments. For example, if one spouse is court-ordered to pay a particular debt (mortgage, credit card, car payment etc.) and doesn’t make the payments on time—or at all—the other spouse’s credit is still negatively affected.

This will potentially affect both spouses’ credit, so that when a spouse goes to buy a new home or secure a new mortgage on the existing home, they may not be approved.

This means you need to take the right steps to manage and protect your credit score.



1.  Come Up with A Plan

  • Work out a mutually agreeable plan on how to handle the joint accounts even before you separate.
  • Evaluate all joint debt and assign responsibility for the payment/ settlement of each debt.

2.  Close or Separate Accounts

  • If possible, pay-off and close joint accounts.
  • If not permissible, request for the conversion of the accounts from joint to individual accounts.

3.  Be Responsible

  • Honor your obligations. Until the accounts are fully paid up, closed or separated, you need to work together with your partner to ensure that all joint accounts are paid up/ cleared.

4.  Be Civil

  • Maintain a civil relationship throughout the divorce process.

Katina Farrell, CDRE is an experienced Realtor & Managing Broker who specializes in real estate transactions, with expertise as a trained Certified Divorce Real Estate Expert and a Certified Negotiation Expert. To schedule a complimentary chat and discover more ways Katina can help you, call: 720-295-8848 or email: [email protected]

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