Protecting your credit
in a divorce
It pays to protect
your credit record in a divorce. Randolph Stuart Phillips is just one
ex-spouse who found this out. Here is some advice from experts:
If you earn
less than the spouse you're divorcing, it might be a good idea to apply for credit
cards before the decree is issued, says Carol Ann Wilson, president of the Institute
for Certified Divorce Planners.
"Often the credit card companies
will issue her a card before the divorce, using his income to help qualify her,"
Wilson says, adding that discretion counts: "She doesn't call and say, 'We're
getting divorced.' "
of lingering joint accounts, she says. If a man and a woman have a joint credit
card, they both are liable for the balance -- even if one of them promises to
- For that reason, Wilson says, savvy
financial advisers tell divorcing people to cancel their credit card accounts
and get new accounts in one name.
the creditor to dispute any inaccuracies in a credit report, advises David Mooney,
spokesman for Equifax. He says that in most cases involving the authorized user
of a credit card whose holder declared bankruptcy, the creditor will stop reporting
- Avoid surprises by being aware,
counsels divorce lawyer Lynne Z. Gold-Bikin.
"During the marriage,
people ought to keep aware of what credit cards they have access to. Ignorance
is not bliss when it comes to credit."
In a typical marriage, one
partner will take care of the bills. If you're not the bill-payer, don't assume
that everything is being taken care of on time, Gold-Bikin advises. Ask questions.
Or, to quote a Russian proverb that Ronald Reagan adopted: "Trust but verify."
Credit Bureaus, the lobbying arm of the credit-reporting industry, recommends
that you contact all your creditors and let them know you're getting a divorce.
This advice contradicts what Wilson says, and probably works to the advantage
The ACB recommends closing all
joint and authorized-user accounts and opening new, separate accounts. The trade
group notes that when one spouse opens an account and allows the other spouse
to be an authorized user, the person who opened the account is responsible for
Ironically, it is this very reasoning
that causes Randolph Stuart Phillips to believe that he has a case against the
credit agencies for reporting his ex-wife's bankruptcy in his credit record.