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Dealing with credit cards during a divorce

When Texas couples decide to divorce, they may be concerned about taking a credit hit during the property division process. Marital status is not a factor considered by the credit bureaus, so a divorce itself would not necessarily damage each individual's credit rating. However, joint accounts and the process of dividing assets and debts can pose some unique challenges. In general, spouses agree as to how different assets and debts will be handled in the divorce, and one ex may be given responsibility for paying off a joint card.

However, it can be important for spouses to close joint accounts before the divorce is finalized and transfer the debt to a new card in the responsible party's name alone. After all, the divorce agreement does not bind the credit card company. This means that if an ex fails to pay the agreed amount after a divorce settlement, the creditor can go after the other partner. The results would be just as negative for both parties' credit scores. Each spouse can apply for their individual cards before closing the joint accounts. This could prevent a temporary score dip from hindering their credit reports.

In addition, a spouse should make sure to remove the other partner from individual cards if they are listed as an authorized user. In some cases, lenders may agree to accept transitioning a joint card to an individual account if the individual has a strong enough income and credit history to merit approval of the change.

Completely separating financial accounts, including credit cards, can be important to protecting each spouse's credit rating after a high-asset divorce. An attorney can work with a divorcing spouse to help them reach a fair settlement on a range of divorce matters, including property division.

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