A divorce can impact many areas of your life, from where you live to how your family is organized. However, one particularly hard area for many people in a divorce is finances.
There are various ways a divorce will affect your financial situation, and you may already be aware of some of them, including that you will have to divide your marital property with your spouse. But there may be some things you haven’t thought about, such as how to protect your credit from your spouse during the divorce. Even a divorce that starts out very peacefully can suddenly turn ugly, so it’s vital you take steps to protect yourself, and that includes making sure your spouse’s actions don’t harm your credit.
Make Sure the Bills Are Paid
Even if you know your spouse will be taking over certain accounts, if your name is currently on them, missed or late payments during the divorce will hurt your credit, too. Negotiations in divorce can take weeks or months to come to an end. You can’t just assume your spouse is paying what they agreed to pay during that time. The last thing you want to discover when you go to get a car loan, a home loan, or another credit account after your divorce is that your spouse hasn’t been paying the entire time and your credit score has paid the price.
Make the minimum payments on the accounts your spouse is or will be responsible for once the divorce is finalized. Keep track of those payments and keep your proof of payment, too. Your attorney may be able to help you recover the money you paid on behalf of your spouse.
Contact the Creditors Involved
Contact the creditors on the accounts your spouse is taking over and inform them of your divorce. Ask the creditor to note in the account that you and your spouse are divorced. Explain that you now want this account to be handled as is detailed in your divorce settlement. Note you may need to provide the relative pages for that account in your settlement to the creditor. After you have this conversation, be sure to follow up; send the creditor a letter with your instructions and a recap of the conversation. Ask the creditor to send you written confirmation that the actions you requested have been taken.
Once your spouse takes payment over from you on the joint accounts they are taking as a part of the divorce settlement, contact the creditor on those accounts and let them know you want to receive loan statements, too. This way, you will know immediately if your spouse falls behind or stops paying and can take action if necessary to protect your own credit.
Close the Account if Possible
Speak to your spouse about closing any joint accounts you were both on during the marriage. If, for example, there is a balance on a joint credit card your spouse is taking over as part of your divorce, they may be able to roll over the balance to a new credit card in their name alone. This way, you will not have to keep track of those accounts any longer; once they are solely in your ex-spouse’s name, you will no longer be responsible for them. Offer to do the same on the accounts you are going to take over.
Good credit is necessary to access credit products such as credit cards, home loans, and auto loans, so it’s very important you take action to protect your credit as early on in your divorce as possible. Speak to your family law attorney for assistance if you’re not sure what steps to take related to your credit.