When you get separated and divorced, you have new financial responsibilities,
whether you are the husband or wife. Suddenly, you have to deal with things like
child support, spousal support, and qualified domestic relations orders (QDROs), all
of which are new for you.
If you fail to separate your accounts or to create a post-divorce budget,
it can be difficult to maintain your credit score, rent a home or apply
for a mortgage, or open a new account in your name. But, divorce doesn't
have to mean financial disaster. There are steps you can take to ensure
that your good credit that took years to build isn't negatively affected
by a divorce.
Protect the Good Credit You Have
Under Pennsylvania's laws of equitable distribution, a
divorce decree does not absolve you of marital debts. Even if your spouse agrees
to pay marital debts, you're still on the hook if he or she fails
to pay them.
If you have joint accounts, such as a mortgage, an auto loan, or credit
cards, you are responsible for ensuring the accounts are paid, even if
your spouse is ordered to pay a particular bill.
Realize that if your spouse pays late on a joint account or if they don't
pay the account at all, the creditor will not only report it on your credit,
they can take legal action against you for the debt.
Our advice to you:
Separate or close all joint accounts. If you can afford to, pay off and either close or separate all joint accounts
before the divorce. This way, you can make a clean break.
Decide what to do with the house. If you own a home with your spouse, you must put serious thought into
what you're going to do with it. Often, the best financial decision
is for the couple to sell the house and split the proceeds. If you wish
to keep the home, make sure you can qualify for a mortgage in your name
alone and that you can afford the maintenance costs.
Make sure all bills are paid. Before, during and after your divorce, you must keep paying all of your
bills. Until you separate all of your accounts, you and your spouse cannot
afford to miss any bills as this will affect your ability to get loans
in the future. If you miss just one payment it can be reported on your
credit for seven years, making it difficult to establish credit on your
own. Ignore friends' suggestions to stop paying payments or run up
the credit cards as this behavior will lead to negative consequences.
Establish Your Own Credit
If you don't already have much of a credit history built up, it's
time to start establishing your own credit. You can start by getting a
new credit card with a small limit, perhaps one for a department store
or a national superstore. Always pay your credit card bills on time and
pay them off each month.
If you don't have any credit, perhaps you can ask a family member to
cosign for you, providing you are good for it and pay the bill on time.
Remember, the account will show up on the co-signer's credit profile,
so you want to make sure that you are responsible. After a few months
pass, try to get a credit card in your name alone.
If you're interested in obtaining a fast, low-cost divorce in Pennsylvania,
contact Cairns Law Offices for a free case evaluation with an experienced divorce attorney!