Protecting Your Credit in a Divorce
It may be difficult to emerge from divorce with your credit unscathed, but here are some “Dos and Don’ts” to help:
- Don’t: Think you can divorce your debts. While obligations acquired during marriage are marital property to be divided equitably, creditors are not bound by marital agreements. They can still hold you responsible for debts your spouse agreed to pay. So it’s important to separate marital debts through the creditors.
- Do: Start with current credit reports for yourself and your spouse. Note which accounts have one spouse as owner and the other as authorized user. Authorized users aren’t responsible for debt, though it may appear on their credit reports. Either close those accounts or remove your spouse as authorized user from your accounts and vice versa.
- Do: Pay off joint accounts according to your divorce agreement. If payoff isn’t possible, separate the debts — refinance the home in one spouse’s name, for instance, or open an individual credit card and transfer balances of joint cards to it.
- Don’t: Stop paying your bills. This will cause lasting credit damage to BOTH spouses.
- Do: Prepare for your solo future. Establish individual credit with bank and credit accounts in your name only. Create a realistic budget, prioritizing important things like shelter.
- Don’t: Take your eye off the ball. Get copies of statements for any remaining joint accounts. Craft your final decree with specific legal recourse should your ex miss any payments – and be sure you’re notified immediately so you have the option to pay yourself. Finally, keep track with free credit reports – if you choose a different bureau each time, you can get a copy every four months.
For questions about maintaining your credit during divorce, contact an experienced family law attorney today.