How to Protect your Credit after Divorce
If you are currently going through a divorce, you are probably dealing with a range of emotions and feelings. However difficult this may be for you, you must still consider your finances and your credit so that you can forge ahead and create a new life for yourself.
The first concern associated with finances and divorce, of course, is the joint household money. Most married couples, instead of keeping separate accounts, will usually combine their money into joint accounts; and this also holds true for debts. Your debts and your spouse’s debts now become “family debts.” In other words, your debts are your spouse’s and your spouse’s debts are your’s.
Many divorcing couples seek the services of financial professionals to handle such financial issues as: mortgage payments, joint credit cards and investment and retirement portfolios.
However, there are a few things that you should do immediately, on your end, once divorce is imminent:
- Close all joint accounts and open your own personal accounts.
- Consider selling joint assets, including real estate, if you need to resolve joint debt, such as credit cards, car loans, personal loans, etc.
- If you are experiencing trouble paying your bills, contact a reputable consumer credit counseling service.
- Immediately cancel all joint credit card accounts so that you don’t find yourself being held responsible for your soon-to-be ex’s expenditures before the divorce is finalized.
- Open a credit card account in your own name so that you can begin to build your own credit history.
- Order a copy of your credit report so that you have a better idea of what kind of debt – and how much debt – appears in both your and your spouse’s names.
- Resist the urge to spend joint money out of anger or spite. It will get you nowhere financially if you rack up more bills and will only hurt you in the end.
- Encourage open communication with your soon-to-be-ex, if possible, regarding current debts and their repayment terms.
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