If you have been recently divorced or is presently going through the divorce process, handling joint debts is one of the significant issues that you should pay special attention to. This includes joint credit cards that you have or mortgages on a jointly owned house. It is a very important fact to know that if you fail to pay those debts on a timely basis, it will have a great impact on your credit rating even if it is stated in your divorce decree that you are not the one accountable for those financial obligations.

The two kinds of credit card accounts are individual and joint accounts. When it comes to credit history, each is seen differently. Some people think that if they have a credit card with their name on it, the account is a joint account. Keep in mind that authorized users may be designated by the account holder of an individual account and issue cards in their name, although the account holder is still the one liable for the bill payment.

If you designate a person to be an authorized user on an individual account, the account may show up on both of your credit reports. Likewise, if you have a joint account, it will appear on both of your credit reports. If you divorce, you are both accountable for any bills incurred on joint accounts. If you live in a community property state, however, you may also be held liable for any charges on individual accounts held by your ex-spouse. (Rhode Island is not a Community Property State)

If one of the account holders requests to close or freeze a joint credit account, credit card companies are obliged to do it. But without that request, the joint account will remain active. In order to safeguard yourself in case of divorce, here are some of the things that you can do.

Freeze Joint Credit Accounts

You need to do this in order to prevent your credit cards from being run up further and eventually damaging your credit. If you still have an outstanding balance, most creditors will not close an account, but they can freeze it if you request so.

Remove your Ex-spouse as an Authorized User

You alone should have the permission to charge items on your individual accounts. This can protect your account from being used without your knowledge. It can also ensure that you have your own credit after the divorce.

Convert Joint Accounts to Individual Accounts

You should request the credit card companies to convert joint accounts to individual accounts under the name of the person who will be accountable for paying them. However, the credit card company is not duty-bound to do this. They may require the balance to be paid in full or they may ask the person to apply for credit under his or her own name and transfer the balance to that account after that.

Allocate Debts

One effective way of allocating debts is that you and your former spouse should agree to be responsible for full repayment of certain accounts. However, keep in mind that your agreement is not binding on the credit card company. Remember that it is still your legal responsibility to the credit card company to pay an account that your ex-spouse agrees to pay at first but failed to do so afterward.