I’m Divorcing, How Do I Protect My Credit?
If you are getting ready to go through, or are currently going through, a divorce than you want to take action to protect your credit. If your spouse has debt that you do not want as a joint burden, there are some steps you should take.
You need to sign either a postnuptial agreement or a separation agreement. This will help you specify which debts are yours, joint, or your spouse. By identifying the debts, you can make sure you are not accountable for your spouse’s debts. Be sure each party has their own attorney to act on their best behalf.
When the time comes for the property distribution, the judge will decide which debts are considered separate or marital. If something is labels as marital, then both parties will be responsible for the debt. So, in theory, if your spouse doesn’t make any payments then you could end up carrying all the debt. There might be separate debts that can be considered marital by the judge. This could be student loans taken out while married or were paid for by your spouse. The judge would determine who is liable for those debts during the divorce.
Some parties decide to pay off the debt during the divorce process. If this is the route, it will help both parties from receiving any negative marks toward their credit. This should be an agreement made with the lawyers to make sure both parties act in good faith. By working with each other, and compromising, this will help each party walk away with their credit still intact.
If you have a joint bank account, be sure you have a divorce lawyer that can advise you on the best way to handle this during your divorce. Joint accounts are usually considered marital property and will be divided during the divorce process. There are times a spouse might hide assets or remove money from your account so be sure to talk to your lawyer if you fear that might happen.
Divorce can have a negative effect on your credit. Print copies of your credit reports from the major credit reporting agencies. These reports will identify the accounts you have open, the debt you hold, and your available credit. This information will help your lawyer and the court identify the debts and assets you have. Your spouse will need their copies as this will tell any debts and assets they have, possible accounts you may not have known about. These scores will also help you keep track of your credit score. You can identify ways to improve your score, make changes so your spending, or what to ask for with child support and alimony.
To schedule a consultation with an experienced family law attorney at Tom Bush Law Group, please call us at 704-347-0110.