Protecting Your Credit in a Divorce

Most people have heard horror stories about divorce and how it led to unsurmountable debt or bankruptcy, or both. Often, these tales are frightening enough that unhappy spouses stay in hollow marriages, afraid a divorce would ruin their credit and their financial stability for years to come.

While divorce can affect someone’s credit, the divorce itself does not do the damage. This is because divorce does not impact a person’s credit score. What does affect credit is how spouses conduct themselves before, during, and after a divorce.

If you are concerned that filing for divorce will damage your credit, there are strategic actions that you can take to protect your FICO score so it will not be impacted by the divorce. Continue reading as we explain this in further detail.

Resolve All Joint Debts

As someone who is divorcing, your first concern should be joint debts, such as auto loans, credit cards, and mortgages. If possible, close all joint accounts or place them in one spouse’s name alone. If you remain on a debt, such as the mortgage and your spouse agrees to pay it but they default on the loan, the lender can go after you for payment.

Creditors do not care what a divorce decree says, or which spouse is obligated to pay a debt. So, if your ex fails to pay the car payment or the mortgage and your name is on the loan, the late payments will be reported on your credit and the creditor can take you to court for payment. The solution: Resolve all joint debts before the divorce is final so you can make a clean break and start with a clean slate.

If your name does remain on a debt after the divorce and your spouse agrees to pay it, check the account each month to ensure that it gets paid. If your ex cannot pay the debt, your best option is to pay it. Otherwise, your credit will be impacted. It’s better to pay the debt when it’s due and take your ex to court later.

Remove Authorized Users Immediately

If your spouse is an “authorized user” on any of your credit cards, you should remove him or her immediately. If you don’t remove them as an authorized user, nothing is stopping your spouse from maxing out the credit cards in your name, and without any consequences.

When you get a divorce, protecting your finances and your credit should be top priorities, and at Samuelson Hause PLLC, we are highly motivated to protect your assets and credit during the divorce process. To learn more about our expertise, we invite you to review our attorney profiles and publications.

Contact our firmto meet with a Long Island divorce attorney!