Divorce is stressful enough without having to face massive debt. You need to protect yourself and your financial situation before your divorce is final. Here are some tips to help you avoid negative consequences of your soon to be ex-spouse’s actions.
- Establish your own credit accounts. If you and your spouse are on speaking terms, come up with a way to separate and divide your credit card debt. Close out all joint accounts. While in a perfect world this should be done with your spouse’s cooperation, the fact remains many people have been dragged into financial crisis by a spiteful spouse who runs up debt and refuses to pay. By establishing your own accounts and your own credit line, you can protect yourself. Know that if you can’t agree to divide debt, the court will do it for you. Unfortunately, even if the court decrees one spouse has to pay a debt, the credit companies can still come after you if your name is on the account.
- Decide what to do with the house. If you and your spouse agree that one of you will keep the house, it’s important to refinance it out of the selling spouse’s name in order to protect that spouse’s credit. If the spouse who keeps the house isn’t able to refinance the loan into only their name, or if neither of you wants to own the house on your own, the house will need to be sold. Selling the house, or refinancing into one spouse’s name, will eliminate the risk of hurting your credit, in the event the spouse who keeps it stops paying the mortgage. Many people decide to let their spouse have the house, only to discover the mortgage payments have not been made, and suddenly they face foreclosure with their name still on the loan. Protect your credit by refinancing or selling before problems arise.
- Monitor your credit. Become vigilant about monitoring your credit. You can get a credit report for free from each of the major credit reporting bureaus. Stagger your requests so you can keep a close eye on any unfamiliar accounts or accounts which have gone into collection. You need to do this until you are sure your credit and your ex-spouse’s credit is completely separate. You can also purchase a combined report from sites such as myFICO.com.
Protect your credit and financial situation during your divorce. Look out for you first, and assume the worst. Divorce can be messy and emotional. Keep a cool head where your finances are concerned so you can have a truly fresh start at a new life. Our family law attorney can help protect you, and your credit, during the divorce process.
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