Although we understand that divorce can be exhausting mentally, emotionally, and physically; it is essential to keep your financial matters in order and not let unnecessary financial stress add to your exhaustion.
Your marital status does not have a direct impact on your credit report, so filing for divorce will not directly affect your credit score. However, the activity from joint accounts can impact your credit. Cover your bases and consult with your attorney on how to protect your credit during and after your divorce.
The following are some things you can do to keep your finances and your credit in check while you are going through the divorce process.
Divorce Law and Finances
Divorce itself can be complicated, but so can separating your finances and assets. Consult with a well-qualified professional who knows the law. There are two important issues to be conscious of; community property and joint accounts.
When you open a credit card, you are entered into an agreement with the credit card company, or creditor. Your final divorce papers may designate who is responsible for certain debts, but that does not release you from or change the agreement you have with that creditor. It doesn?t matter if you or your ex takes over or if you are a cosigner, the creditors can still hold you responsible for paying the debt if your ex neglects to pay.
If you live in a community property state there will be additional issues to consider. Laws vary from state to state, so you need to consult with a well-qualified professional to find out how your debts will be handled.
Credit Monitoring is Essential
During the divorce process, keep a careful eye on your credit report to make sure everything is reported correctly. Creditors usually post activity on a monthly schedule. It may take a little time for changes to accounts to show up on your report. Checking regularly will make you aware of any creditors you need to follow up with after an extended period of time.
You can enroll in a free credit monitoring service that will alert you to any changes and help you spot wrong information. Watch out for accounts you did not open and for hard inquiries from unknown creditors.
Be Diligent About Managing Your Shared Accounts
If you?ve been married for a long time, you probably have several joint accounts with your spouse. Even after the divorce, accounts that are shared and loans that have been cosigned will most likely still show up on both of your credit reports. If your ex misses a payment or spends too much, that activity could cause your credit score to take a hit. The creditors of these accounts can still come after you for the payments, or worse, collection agencies could start calling you.
It may become necessary to start separating your accounts. You?ll need to review your credit report and look for any joint accounts. You must also keep in mind that not all agencies report your account activity to the three major credit bureaus. This means that your credit report will not always show the complete picture. Make sure you look at the original account agreement and look for other accounts you might have overlooked.
When the accounts in question have been identified, contact the lenders and see what options are available to remove any ?authorized users.? Joint accounts like credit cards, checking or savings accounts, and retirement accounts are a bit more complicated. The solutions will vary due to contact and legal obligations. Talk to your divorce attorney and your creditors for options that are available to you.
If you have other questions about divorce, please CONTACT Sherer Law Offices to schedule a consultation.
