What to Know Before You Sign: The Pros and Cons of Joint Credit
For many people, there are many advantages to opening joint credit cards and joint lines of credit. As with all things, however, there can be serious drawbacks as well. This can be especially true for married couples facing divorce. Financially strapped couples with joint credit may want to consider filing for bankruptcy before they divorce.
The Lure of Joint Credit
Joint credit is a convenient way to make sure two people have access to a common credit line. It is especially useful when one person has poor or damaged credit. Because the credit is reported on both people’s credit reports, joint credit cards and lines of credit are often a convenient way for many to help rebuild another person’s credit.
What many people do not understand is that the debt is not divided between both people. Each individual is responsible for 100 percent of the debt. So, if one person falls behind or does not pay the bill when they agreed to pay it, the non-payment will damage both people’s credit scores.
Joint Credit Often Poses Problems for Divorcing Couples
Joint credit can be especially problematic for married couples when they are divorcing. It is not uncommon for one spouse to ring up the debt on a joint account in an effort to get back at his or her spouse. Although a judge can order one person to pay back a particular joint debt in a divorce decree, the judge has no ability to change the terms of the original credit agreement. This means that even if one individual is ordered to pay a joint debt in the final divorce paperwork, credit card companies and collection agencies can still pursue the other joint account-holder for the debt.
Even when divorcing couples are not trying to get back at each other, joint debt can pose a problem. If the added financial strains of running two separate households become too much, it may no longer be feasible for a person to continue making payments for a joint debt. For this reason, many couples in Atlanta with joint debt often find it useful to file for bankruptcy before they complete their divorce.
Advantages of Filing Bankruptcy Before Divorce
Filing joint bankruptcy during divorce can be an expedient way to lighten the financial burden for both people as they prepare for the next stage of their lives. They can also save on attorneys’ fees. Instead of spending attorneys’ fees dividing the debt in a divorce, married individuals can apply the money towards one bankruptcy fee. Unlike joint credit, people cannot file bankruptcy jointly after they have been divorced.
Getting Help for Joint Credit Card Debt in Atlanta
Joint credit bonds people together, regardless of whether they are married or not. People should always be careful before signing a joint credit agreement with another person. Unemployment, sickness and other life events often make it hard for people to keep up with their bills.
When crisis strikes, there are options available. Families and individuals with joint credit card debt should speak with an experienced Atlanta bankruptcy attorney to learn how bankruptcy can help them regain control of their finances.