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Debts on joint accounts

Q. How do I keep my ex from running up credit card debts on a joint account?

Outstanding joint debts are one of the thorniest financial problems in a divorce. The divorce court may allocate your assets and debts, but it can't force creditors to accept the division.

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Creditors can agree to change joint accounts to individual accounts to accommodate account holders who are divorcing, but there's no incentive for them to do so.

Even with joint accounts, one person is considered to be the primary account holder. The account will stay open as long as there is a balance on the account.

If you're not the primary account holder, you need to protect yourself against your ex continuing to use the account. Write a letter to the credit card company saying that you will not be responsible for any new charges made to the account as of a certain date after they have received your letter. Send the letter certified mail requesting a signature receipt to keep in your files along with a copy of the letter.

Your best move is to pay down the balance on this card as quickly as possible.

Get a copy of your credit report and review it to make sure there aren't any other problems waiting in the wings. Dispute any errors on your account.

Continue to make timely payments on all your bills. To build a credit history, you need credit in your own name. After reviewing your credit report, you should apply for one credit card.

If you belong to a credit union, their card is a good choice for that one application. You can also shop cards on Bankrate but again, only apply for one card. If you are denied, then try for a secured card.

Credit applications are called credit inquiries on your credit report and they stay on your credit report for two years. You don't want to apply for a lot of cards because multiple credit inquiries make you look desperate for credit and lenders avoid lending to desperate people.

Rebuilding your credit history will take some time, but you'll be able to put all this behind you.


-- Posted: Aug. 14, 2002




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