Your credit score is probably the last thing on your mind when you’re planning for or are in the middle of a divorce. You may struggle to manage your debt during and after divorce, maybe you missed a couple of credit card payments because of being too busy handling your divorce finances, or maybe you and your now-ex-spouse disagree over who should pay which debts.
Whatever the reason might be, you may end up joining the ranks of people who are forced to declare bankruptcy after a divorce. While separating from your spouse does not damage your credit directly, the financial consequences that arise as a result could affect it.
But there are ways to protect your credit standing and finances to make sure you come out on the other side with a secure future.
If you’re worried about the financial impact of your divorce, retaining the services of a knowledgeable and accomplished Massachusetts divorce attorney will give you the legal counsel you need to move forward while maintaining your best interests. At Davis Law Group, seasoned family law attorney Jay Davis will be happy to talk to you about the best way to protect your finances through this legal process. You can get in touch with us online or call us at 617-221-3548.
Close All Joint Accounts
When you and your spouse have a joint bank account, both of you are equally responsible for acquiring the debt, regardless of how it is divided in the divorce. If you leave this account open, your ex can add more debt, miss a payment or default, make a late payment, and you’ll also be held responsible for all of it.
So, as soon as you decide to get a divorce — or your spouse files for it — close the accounts that are in both of your names. If you only have joint accounts, open an individual account under which your ex doesn’t have access.
Notify the Creditors About Your New Status
Send a certified letter to notify your banks, credit card companies, and other lenders about your divorce. In fact, this is one of the first calls you make when you’re getting your credit in order. If your joint credit card has been paid off in its entirety, you and your ex just need to agree to close the account.
Pertaining to this, if there’s an outstanding balance on the card, the credit card company will most likely require both of you to settle it before being able to close the account. You may need to negotiate with your ex-spouse to sort out the joint accounts. The credit agency can discuss options that may include selling an asset, a payment plan, or refinancing the debt onto an individual account. Whatever you decide, make sure to get the agreement in writing.
In many cases, when a spouse knows that their ex will not follow through on their portion of the balance, they pay it off in full just to be able to close the account for their own peace of mind.
If your partner is still an authorized user on any of your individual accounts; this will prevent them from racking up new, unauthorized debts in your name.
Please keep in mind that this letter to revoke the authorization on the account must be sent through certified mail.
If all this seems too complicated, our dedicated and resourceful legal team at Davis Law Group, led by divorce lawyer Jay Davis can help keep things simple. Jay can guide you through this process with the care and attention your case needs and the information necessary to make well-informed decisions about your financial security today and in the future. Call us at 617-221-3548 or contact us online to schedule a consultation.
Freeze Your Credit
We only advise this in extreme cases, but if you know that your ex is capable of becoming vindictive and opening accounts in your name or using your Social Security number behind your back, consider freezing your credit.
Credit freezes can save you from financial ruin when you’re dealing with a vengeful or financially irresponsible ex. Once your credit has been frozen or a “fraud alert” has been put on your accounts, no one can open new lines of credit in your name — not even you.
As complicated as this process may sound, it is completely free and very easy to do. Just contact each of the three major credit bureaus (TransUnion, Experian, and Equifax) individually to request the freeze. You can also freeze your credit report by calling the two credit bureaus that may have information about you: Innovis and the National Consumer Telecom & Utilities Exchange.
We also recommend keeping your credit frozen and only opening it back up when you’re applying for new credit. Close it back again immediately if you open it back up for this reason.
Don’t Cling to the House
More often than not, women want to stay in the marital home because that is where they raised the children, and they are emotionally attached to it. If you think keeping the house is the best choice for you, ask yourself the following questions:
- Can you afford to buy it from your spouse?
- Will you be able to pay mortgage payments, utilities, real estate taxes, repairs, etc. to support the house on your own?
- Are you only keeping it to spite your ex?
You may find that the house is not really worth the issues it will cause, and the impact it will have on your relationships and finances.
Have Questions or Concerns About Debt in Divorce? Contact Davis Law Group
Now that you know some of the important ways to protect your money in a divorce, we hope you reach out to us for a consultation. Law offices of divorce and family attorney Jay Davis have the skills and diligence required to help you find creative solutions that will benefit your situation. Please contact us today at 617-221-3548 or send us a message online for a no-obligation, free initial consultation.
James H. (Jay) Davis III
Thank you for reading. Need to talk? 617-221-3548