Keeping credit cards after a divorce

Don Taylor, Ph.D., CFA, Bankrate.com

Dear Dr. Don,

I am almost divorced and we have signed a property settlement. Is there any way I can keep the "joint" accounts and credit cards that are mine now? I have many deposits and bills being paid from same. Thanks for your answer.

-- Janice Jaundiced

Dear Janice,

You can ask the creditor to convert joint accounts to individual accounts, but it is at their discretion whether they are willing to do so. You may need to reapply for credit with the company to open an individual account.

The Federal Trade Commission's online publication, Credit and Divorce, says the following:

If you're considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it's important to make regular payments so your credit record won't suffer. As long as there's an outstanding balance on a joint account, you and your spouse are responsible for it.

If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.

By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.

Get a copy of your credit report and credit score from the three principal credit bureaus. It will provide a snapshot of your credit history and allow you to make sure you're not missing anything in closing down the joint accounts or transitioning them, when possible, to individual accounts. Bankrate.com's Guide to Managing Credit provides the contact information for the three major credit bureaus.

The key in managing your credit in a divorce is to recognize that the creditor isn't party to the divorce and isn't bound by the terms of a divorce decree. Joint obligations survive the divorce, and late payments and missed payments will continue to affect your credit history. You may have legal recourse against your ex-husband if he doesn't keep to the terms of the divorce decree, but that won't stop lenders from looking to you for payment.

Since you're at a point where you've already signed a property settlement, changing accounts to individual accounts should be fairly straightforward. Work with the banks and financial institutions to make these changes.

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