Financial stability is an important factor to consider for married couples. Unstable finances often cause conflicts between spouses and can be a heavy burden in a marriage. A worst case scenario is it may lead to divorce.
While divorce proceedings (and the divorce itself) can cause emotional distress, they also contribute to more financial woes. Divorced couples end up paying a lot of cash due to legal fees, and lose most assets in the process. Consequently, most divorcees decide against remarrying due to financial concerns. Some would only consider remarrying when they can keep separate accounts. Others only marry partners with good credit scores.
Credit scores and credit histories of individuals are often affected by joint credit accounts since all participants of the said account are affected by the activities of one using the account. This means that an individual listed as a joint owner or authorized user of the account is responsible for the transactions made using the account. This is often a major problem for couples who get divorced because of the actions of the spouse.
Joint accounts are often discussed during court proceedings. If the ex-spouse owe a major amount of money due to huge credit card expenditures and is unable to pay, the other spouse, as listed in the joint account, must settle the debt.
This is where the divorce decree comes in. The divorce decree settles the issue of who pays for the expenditures made. This specifies who is responsible for accounts that were opened during the marriage. However, this does not break the contract with the lenders.
If the ex-spouse is unwilling to pay and the records have not been changed by the credit firm or bank, late payments will still appear on both credit reports. This creates a negative impact on the credit standings of both individuals. This is often settled in court when the other name is taken off the account, or the account is closed completely. However, the credit history remains.