Divorcing? Protect Your Credit
Is it time for you to consciously uncouple? You’re not alone. As you prepare to start the process, know that you’ll be separating the parts of many layers of your life, certainly to include your assets and finances. While it may not mean that both parties can maintain the same level of accustomed lifestyle, you can still navigate this process while mitigating the risk of damage to your credit. The first rule of thumb addressing finance in divorce is to preserve what you’ve worked to create financially, which means taking the necessary steps to protect your credit, as well.
During divorce proceedings, close any joint credit accounts to avoid further charges that may be abusive. Do your best to pay off or reduce the balances on joint accounts, and completely close the accounts once balances are repaid. This may not be possible to do immediately, but will rather be a gradual tapering of open joint accounts until they dwindle to zero. These separating steps can help prevent your ex-spouse from running up debt both during and after your divorce proceedings.
After you map your plan to close joint accounts, consult with your attorney about how divide the other types of debt equitably and draft an agreement proposing your approach. Although this is most often part of the final expression of the divorce agreement, divorce proceedings can continue on for many months longer than they might initially appear to do. Having a working agreement in effect during that time can help you move toward dividing your debt (and paying it down) while you’re finalizing all other details – a plan that can help you protect your credit and avoid disputes and abusive practices as other issues are addressed and recorded.
No Credit Card Required
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc., an Experian company.
