How Do I Protect My Credit During a Divorce?
Going through a divorce is already an emotional, stressful, time consuming, and expensive process. What can make the whole process even more difficult is walking away from your divorce with a credit score that you don’t recognize. The truth is, sharing credit with your spouse may be a great thing, but during a divorce, your soon to be ex’s financial decisions could adversely affect your financial picture. If you are pursuing a divorce in Spartanburg or elsewhere in SC and do not yet have an order in place, here are some tips for protecting your credit during the divorce process:
- Remove Your Spouse’s Name from Your Credit Card
If you have a credit card that is in your name, but your spouse is an authorized user on the card, remove their name immediately. Even if your spouse is an authorized user, if debt is racked up, you – the cardholder – will be responsible for paying for it. Make sure that you keep your lawyer in the loop, as they can provide you with advice regarding cutting off an ex from your credit card.
- Close Joint Cards and Other Accounts
Not only should you remove your spouse as an authorized user on your credit card, you should also remove their name from any credit card accounts held in joint names (or remove your name). Note you will likely have to pay the balance on any such account down to $0 before you can do so. You may also consider closing any joint credit card accounts, although beware doing so may negatively affect your credit. With regard to joint bank accounts, talk to your bank about what would be involved with removing your spouse’s name from the account versus closing it. With both credit cards and bank accounts, if you keep your personal funds separate, you can better ensure your spouse does not have access to your finances in the interim while your divorce case is pending.
- Know What Your Debts and Financial Responsibilities Are
One of the easiest ways to harm your credit score is to fail to pay a bill you owe simply because you didn’t know you had it. If your spouse has credit cards or loans where your name is listed as an authorized user or is on the loan, creditors may come to you for repayment. Furthermore, things may be in your name, such as a utility bill, but because your spouse always took care of the payment, you completely neglect it during the divorce. AARP recommends that you check your credit regularly, keep your address updated and do mail forwarding if you move, and request monthly statements for all accounts.
It is essential that you know exactly what you are liable for each month. If you are responsible for making payments on something that you don’t think is fair, you should talk to your lawyer immediately about how to resolve the problem. However, not paying a debt is not a good option; creditors don’t care about your personal situation and will seek payment regardless.
- Work with a Financial Planner
Sometimes, understanding debts and how to split them is much more confusing that just paying off a credit card and then closing it. For example, if you and your spouse have a mortgage that is in both of your names and your divorce has yet to be finalized, you may not be sure who is responsible for paying for what, especially if your spouse is refusing to make payments now that they are not living in the home. You should contact a financial planner as soon as possible to get the full rundown on how to avoid serious harm to your credit and what steps you need to take to protect your economic future.
- Hire an Experienced Divorce Attorney
You should hire an experienced divorce attorney the moment that divorce is on the table. Not only can an attorney advocate for your financial rights, an attorney can also help you to avoid costly mistakes (like closing a credit card that your spouse relies on for basic necessities, which could be penalized).
You want an attorney on your side that you can trust, and who is experienced in all areas of South Carolina divorce law. The experienced divorce attorneys at The Cate Law Firm, P.A., are just the team you’re looking for. Contact us today at 864-585-4226 for your initial consultation.