Divorce Situation Example - Part 2

“A joint account is one where either of two parties can sign, can make separate charges, and make separate payments. However, because both signed, either one is responsible for the balance, or the monthly payments.”

You can take three simple steps to protect yourself from surprise problems. Each step may be done in a clearly worded one page letter. You should send a copy of the appropriate letter to each joint credit account issuer by certified mail.

Step 1. Request for Account Address Correction
This makes sure that as long as you are a signer on the account that you receive a timely copy of the monthly bill.

Step 2. Notification to Creditor of Non Responsibility
This makes sure that you limit your financial responsibility even if you are still a signer on the account.

Step 3. Request for Separate Account for responsible balance
This requests a transfer of your portion of the balance to a separate account so that whatever happens on the joint account is not your responsibility.

Without proper notification, the creditor will hold both parties responsible for amount owed on that account no matter who actually made the purchases or got the goods or services that were paid for with the joint account. The creditor will routinely put late payment remarks on the credit report of both parties, because they have no information or Account Holder REQUEST/NOTIFICATION to stop them from doing otherwise.

If either "Ex" runs up the balances on the joint accounts, the ripple effect of such charges can be like a tidal wave. The monthly payments typically go up because of the higher balance, and the debt-to-income ratio is eroded for each "Ex", making it harder for each of them to get new credit, usually at a higher cost. This debt-to-income ratio is important for buying a car, getting a credit card, or buying or refinancing a residence.

We have compiled a Comparison Chart to demonstrate the importance of a credit rating.