As part of the divorce proceedings, your attorney will at some point be trying to determine what credit card debts are in each of your individual names as well as shared accounts and authorized user accounts. Often times, understandably, clients are not sure. The distinction in the type of account is important, as it not only affects future liability on the account but also future reporting to the bureaus.
The liability for an individual account lies with the person whose name is on the account (presumably the person who opened it). A shared or co-debtor account allows the credit card company to go after either or both parties on the account. An authorized user situation creates a more complicated scenario. The credit card company cannot attempt to collect payments from a mere authorized user. Their recourse for collection is against the individual whose name is on the account so long as the authorized user did not sign the application or give their social security number to the credit card company. But it is important to know that the credit card companies will still report the payment history on both the individual owner and the authorized user to the credit bureaus. So, if you are going through a divorce, and you are an authorized user on your spouse’s account, be sure to contact the credit card company and have yourself removed as an authorized user. If you are the owner of the account and your spouse or former spouse is an authorized user on the account, call the credit card company and remove him or her as an authorized user on the account. Taking this action timely should help you to obtain the most accurate information being reported to the three credit bureaus.
The three major credit bureaus are Trans Union, Experian and Equifax. The reports of each of these bureaus differ in content. It may not be a bad idea if you are going through a divorce to pull all three. Under federal law, everyone is entitled to one free report from each bureau every year. So a savvy consumer can get a free report every four months on a rotating basis from each of the three bureaus! But be careful. There are a lot of sources that actually charge for these reports despite their name! So to get the free ones, be sure to go to www.annualcreditreport.com.
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Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog.