One divorce topic that we haven't addressed on this blog yet is prenuptial agreements. These are important contracts that any soon-to-be-married couple should at least consider -- but we'll have more on this topic at a later date. For the time being, we bring up prenuptial agreements because they relate to credit, debt and divorce.
A prenuptial agreement can address the debts that spouses bring into a marriage. They can also address debts that you accrue during the marriage, either upon its original creation or in an update to the prenup later. Whether you have a prenup or not, though, is somewhat irrelevant to the topic at hand: debt and divorce can be a brutal combination. You should address your debt as soon as you can when a divorce is on the table.
Consider this example: say you and your spouse agree to divorce, and in the ultimate divorce decree it is accepted that your ex-spouse will pay the debts you have in a joint credit account. A few months pass, and one day you get a call from creditors wondering why you haven't come current on your account. As it turns out, your ex-spouse wasn't responsible and never paid back the creditors.
Now your credit score is being damaged, even though legally your former spouse was supposed to fulfill his or her obligation with the creditors.
It is best for divorcing spouses to balance their accounts before they complete their divorce (or as soon as possible thereafter) to alleviate any headaches late payments may cause.