Joint Credit Presents Challenges For Married Couples

All that most New Jersey couples need to become legally joined in life is a marriage certificate and a ceremony. If they are lucky, they also receive a few bonuses, such as cake, music and a nice meal. Becoming legally joined in debt is even easier. All a married couple needs to do is sign on a dotted line.

It is essential for married couples to educate themselves on the world of joint credit. They should learn who is responsible for payment and how joint debt affects credit scores. It is also important to learn how potential lenders view joint debt.

There are many benefits to joint credit. Keeping balances low or paying them off each month helps the process run smoothly. Additionally, open communication about who is responsible for paying the bills and current account statuses helps prevent future difficulties.

However, there are also drawbacks to joint credit. Agreements in divorce court have no bearing on who is responsible for joint credit. It does not matter what payment arrangements are agreed upon in court — both spouses are still responsible for 100 percent of all joint debt.

The death of a spouse can also have a negative effect on joint credit. If one spouse dies, the other can be left with a lower income, unable to pay all the bills. Unfortunately, according to creditors, the surviving spouse is still responsible for all outstanding joint debt.

Filing for bankruptcy also presents certain challenges in terms of joint credit. Bankruptcy can be filed individually or jointly. However, if a bankruptcy petition is filed individually, the joint account holder is still responsible for repaying any joint debt. Additionally, if one spouse files for bankruptcy, both spouses' credit reports will reflect the bankruptcy. This can potentially damage the non-filing spouse's credit score.

Decisions about joint account management and bankruptcy should be taken seriously. If you or a spouse are experiencing difficulty with joint debt, or are considering filing for bankruptcy, an experienced bankruptcy attorney can provide guidance and help you make the right financial choices.