After all, your credit profile is always evolving. Your recent bill-paying pattern is critical. Your behavior during the next 18 to 24 months is most important in deciding whether you're a good credit risk. Even one late payment can affect your ability to get a mortgage.
How to protect yourself from a spouse's debt
Help is available if you're having difficulty paying bills. Other organizations offer quality credit counseling as well. Be sure the organization you work with is non-profit, provides budgeting and financial management training in addition to any debt management plan, and does so at little or no cost. Be very cautious of any organization that claims it can provide a quick fix to your credit problems, provides you with no financial management education, or charges substantial fees for its services.
Bankruptcy Is a Last Resort Bankruptcy should be the last move to make if you get in over your head. It's not an easy way out.
Credit Card Debt
Filing for bankruptcy is no guarantee that it will be granted, because a court judgment must be made. Even if all you do is file your bankruptcy papers with the court, it gets reported on your credit profile. Not all debts are included in bankruptcy. Things like alimony, child support, student loans and taxes secured by liens still must be paid consistently.
Community Property States
Bankruptcy remains on your credit history for up to 10 years. While a declaration of bankruptcy removes many debts, any reference to filing, dismissal or discharge still appears on your credit history for up to 10 years. During this time, you'll find it more difficult, if not impossible, to get a new mortgage, a personal loan or a credit card. Consider Mediation Mediation can make things much fairer by helping you and your ex-spouse work out a reasonable and equitable divorce agreement.
Texas Community Property & Spousal Debt
If you'd like help finding a mediator, contact the American Arbitration Association. To locate an attorney, check with your state or local Bar Association. What's on Your Credit Report? Stay up-to-date with your latest credit information for free and learn what lenders might see when reviewing your credit. Our Editorial Policies: The information contained in Ask Experian is for educational purposes only and is not legal advice. Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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If one spouse incurs a debt as the agent for the other spouse, or if the debt is for basic living necessities, then both spouses may be help jointly liable, together with the jointly help community assets. Further, each spouse has sole management and control over his or her community property that each would have owned except for being married, such as personal earnings. This sole management community property may only be used to satisfy the debts of the spouse that manages the property or the joint debts.
Everything You Need to Know about Marital Debt in a Texas Divorce
When looking at borrowed funds, the examination goes further into the intent of the spouses in incurring the debt. Most credit cards are opened with an account agreement. From a contract law perspective, only the parties to the contract are bound to the terms of the agreement. Therefore, it is simple to determine who is contractually liable if one has a copy of the account agreement — which hardly ever happens in practice.
If that is the case, the practitioner can utilize the credit report to determine if the spouse is contractually responsible, or just an authorized user.
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Arguably, if a spouse is designated as an authorized user then that may create agency as defined above. Alternately, if the purchases were for necessities, liability could be present regardless of whether one was an authorized user or not. Nevertheless, an authorized user should probably not seek to assume this unsecured liability in the decree.
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If this is done, the authorized user will have a difficult time in restricting the future access of the other spouse to that account. While an in junction may assist in protecting the authorized user, it would still be advisable to not seek responsibility for the payment of this debt. Alternatively, the spouse who is the primary card holder should as soon as legally possible revoke the authorized user status of the ex-spouse to avoid problems. Otherwise, if a debt is allocated in a divorce to a spouse who is not legally liable, then the spouse has little motivation to pay and there are few legal remedies available in the court system to force payment against a non-willing spouse.