Divorce is not one of the happy milestones in your life that you plan for, but it happens, and it could happen to you. Should you be on the verge of a divorce, or already involved in procuring one, there are many serious financial issues to resolve in order to protect yourself from major financial setbacks and liabilities.

If you are contemplating a divorce or recently have been through one, you should look closely at your credit and liabilities as they relate to your approaching single status. Joint credit accounts opened during a marriage may have potential benefits and pitfalls.

An illustrative and painful example:

Dick and Jane recently divorced. The divorce decree stated that Dick would pay the balances on their three joint liability accounts. (2 Credit Cards and 1 Home Equity Line of Credit). Dick neglected to pay for these liability accounts, and the creditors contacted Jane for payment. Jane produced the divorce decree, insisting that she was not responsible for the accounts.

The creditors correctly stated that they were not parties to the decree and that Jane was still legally responsible for paying off the couple’s joint accounts.

Jane later found out that these non-payments and late payments appeared on HER credit report.