During divorce things can fall through the cracks, especially when your mind is busy thinking about your how often you’ll get to see your children and where you’ll be living for the meanwhile. Unfortunately, one of the concerns that many don’t consider could devastate your financial security. If you’re afraid of the fiscal uncertainty divorce creates, here are a few simple tips to help you protect your credit.
1. Order Credit Reports
The first thing you should do once a divorce is looming is order a credit report and view the debts attached to your name, both individually and jointly with your spouse. Go through the report and ensure there are no discrepancies, such as mixed files or identity theft.
2. Separate & Freeze Joint Accounts
Attempt to separate your jointly held accounts as best as possible. You can do this by paying off debts, transferring the balance to a card held solely by you or by placing a freeze on those accounts to prevent future charges. However, you should consult with an attorney before transferring funds or freezing an account, as there could be legal consequences if that account is being used to pay for bills, groceries, etc. In addition, debt division is usually part of the divorce process, which can help prevent you from accidently taking on your spouse’s debt.
3. Remove Authorized Users
Credit cards usually allow you to add authorized users who are allowed to use the card, but are not responsible for repayment. If the divorce becomes a bitter affair, a spouse could potentially run up the balance on a credit card you have to pay back. Remove all authorized users and remove yourself from your spouse’s cards as well. If they miss payments, it could potentially affect your credit.
4. Credit Monitoring
As added protection, you may want to consider investing in a credit monitoring service, which can help protect you against identity theft, such as your spouse opening a credit card with your name. You’ll receive regular updates on your credit score and changes that show in your report, allowing you to prevent possible exploitation.
5. Settlement Provisions
Use your divorce decree as an official way of financially protecting yourself. Ask your attorney to include conditions to help shield you from potential credit damage. A divorce agreement can include a time limit for refinancing, to ensure that you are not held liable for possible mortgage debt at a later time.
If you’re planning on or going through a divorce, contact me at the Law Offices of Jeffrey S. Graff today. As a Westlake Village divorce lawyer with more than 30 years of experience, I understand the pressure and stress associated with family law matters. Don’t hesitate to enlist my immediate representation.
Call me at (805) 633-4999 for a free initial consultation!