Experienced divorce attorneys in Jupiter, Delray, Wellington and elsewhere in Palm Beach County understand that ending a marriage of any duration is stressful. While you, your spouse and the lawyers are trying to settle everything, take a few moments to remember how important your credit rating will be after you are single. Today we share some tips for protecting your credit during divorce from writer Lynnette Khalfani-Cox from an article at AARP:
- Joint accounts should be closed immediately. Whatever happens from the “we are getting divorced” to the “we are divorced stage” can have an impact on your credit. This includes one spouse adding debt, missing payments, etc. Be careful to not allow this to happen by closing any joint accounts.
- Inform creditors. According to Bill Hardekopf, a credit expert and CEO of LowCards.com, “Tell [creditors] that you do not intend to be held liable for any debt accumulated after the date of the written letter. Request that they put the account on inactive status so no new additional charges may be added, and stipulate that once the balance is paid in full, the account is to be closed completely.”
- Request monthly statements. Request printed statements from all accounts left open with outstanding balances. Read them every month to make sure payments are continuing.
- Consider the house. Taking the house in a settlement is not always the best idea. With the real estate market constantly in flux, it’s important to weigh the options of keeping the house and not. Keeping it can be a huge drain on cash flow and may not provide the liquidity needed if other emergency expenses arise.
- Update contact information. Bills will continue to come no matter where or with whom you live. In order to stay on top of them, update your address at usps.com or the post office. This is another way of assuring you are on top of your bills and keeping your credit clean.
- Use credit as a tool, not an escape. Using credit cards responsibly is a life time habit. Don’t take your frustrations with the divorce process out on your finances by binge spending. Khalfani-Cox says “Thirty percent of your FICO credit score is based on the amount of credit card debt you carry. The lower your credit card debt, the higher your credit score will be.”
- Check credit report. Use Equifax, Experian, TransUnion or AnnualCreditReport.com to check your credit report and work to fix any problems that you find.
- Paying the spouse’s debt. “If a spouse didn’t pay certain debts he or she was ordered to pay in a divorce proceeding, you may want to go ahead and pay those debts in order to maintain your credit rating.” Later, if needed, you can go to court to try to “get a judgment against your ex for not following the court order.”
Getting divorced may take all the emotional resources you have for a challenging season in your life, but it doesn’t have to waylay your entire financial future. Use these tips to help protect your credit rating and make the future a little easier to navigate.