9 tips for dividing credit card debt
There are some steps you can take, experts say, to minimize or eliminate your exposure to jointly held credit card debt during a divorce:
Step 1: If you don't have a major credit card in your name only, apply for one now. You'll need it for your post-divorce life and it will make transferring your share of jointly held balances easier.
Step 2: Inventory all your jointly held plastic: Go through your wallet, list your cards, then pull a copy of your credit bureau reports to see the accounts listed as open in both your names.
Step 3: With that inventory in hand, call all the credit card companies and get your current balances. Write down the cards and their balances.
Step 4: If possible, sit with your spouse and discuss how to handle the debt. If you have spare cash or funds available in a home equity line of credit, it may be easiest to pay off the cards and then close the accounts. If not, you can divide up the debt, transferring your share to your own cards and then canceling the joint accounts.
Step 5: Either sign on with a credit monitoring service or make plans to pull your credit report every three months during the divorce process to ensure that the three main credit bureaus -- Equifax, Experian and TransUnion have accurate information about your current credit card accounts and that no new joint accounts are opened by your soon-to-be-ex-spouse. Federal law permits you to get a free copy of each report once a year from http://www.annualcreditreport.com/. Keep an eye out for new accounts in your name, too. Identity theft by family members is common, and you're in a situation where your ex knows all your personal information and isn't too pleased with you at the moment.
Step 6: If you can't discuss the debt with your spouse, enlist a mediator or financial planner to help you come to a resolution. Involving an attorney can be expensive, but may be your only option if your spouse won't cooperate.
Step 7: If you're the one who moves out of the marital home, make sure you notify your credit card companies of your change of address and file a change of address card with the Postal Service.
Step 8: Whatever resolution you come to, follow up to make sure it is implemented. Don't stop following up until the debt is paid off or divided into separately maintained cards.
Step 9: After your divorce, continue with the credit monitoring service or keep pulling a copy of your credit report every three months. Once your divorce has been final for two years, you can cut back to monitoring your credit report every six months or once a year. This way you won't be blind-sided by an unexpected problem relating to your former joint accounts.
To comment on this story, write Editors@CreditCards.com.
- 5 books, 4 movies to learn more about personal finance – Further your and your family's money savvy with these expert-picked flicks, reads ...
- Save money in the new year with these 8 card tricks – Want extra cash to spend in the coming year? Gaze into your bill and look for unnecessary charges ...
- Multilevel marketing: How selling your way out of debt can sink you deeper – Think companies such as Herbalife, LuLaRoe and AdvoCare can dissolve your card debt? If you're not careful, you might end up owing even more ...