You’ve probably heard horror stories about people who say their divorce ruined their credit. You’ve also probably heard about divorces that drove people to bankruptcy, mostly because their ex maxed out their credit cards or failed to pay bills. While this has happened to many people, it doesn’t mean that you are powerless to stop it from happening to you.
If you have joint credit card accounts, joint bank accounts, joint auto loans, or a joint mortgage with both your names on it, you’re better off cutting off these financial ties to your spouse if possible. You see, joint accounts are where spouses get into the most trouble when they divorce. Why? Because, as long as you share an account with your ex, you are on the hook for the account as long as your name is on it.
Even if the divorce decree says that your ex is supposed to pay a certain debt, creditors don’t care what the divorce decree says. If your ex falls behind or stops paying an account, the creditor will go after you and the black mark will go on your credit as well.
How Do I Monitor My Credit?
The best way to protect your credit in a divorce is to close all joint accounts or remove your spouse’s name from an account (or have your name removed) so he or she can’t damage your credit by maxing out a card or failing to pay on the debt. This generally applies to credit cards, auto loans, and mortgages. If you can do this, you can make a clean break and you won’t have to worry about your spouse’s spending habits or lack of discipline hurting your credit rating.
Ways to ensure your credit doesn’t take a hit because of the divorce:
- Run both of your credit reports before the divorce is filed so you know exactly what debts you owe and whose names are on the accounts.
- Close all joint accounts or remove one spouse’s name from any joint accounts so only one spouse is liable for the debt.
- If possible, pay off all joint credit card debts, then close the account or remove a spouse from the account.
- If you absolutely have to keep a joint account open, you must monitor it monthly to ensure your ex is paying on it as they’re supposed to. If they miss a payment, you have to pay for it. Otherwise, your credit will take a hit. It’s better to pay the bill and take your ex to court then let their delinquency hurt your FICO score.
- After the divorce, monitor your credit monthly to make sure that everything is closed and paid off as it’s supposed to be according to the divorce agreement.
We hope you found these tips helpful. If you’re interested in filing a cheap, no-fault divorce for only $219, contact Cairns Law Offices at (888) 863-9115.