Have you and your partner mutually decided it’s time to part ways, but are afraid of the impacts it may have on your credit? The physical act of divorce itself won’t damage your credit. There are other factors that could potentially affect it and lead to financial trouble. Our divorce lawyer in Massapequa could help you better understand these factors, as well as guide you through the divorce process.
What are the factors, and how can I avoid them?
- Joint accounts:
Some accounts could’ve been solely in your name prior to the marriage. This could mean they will only appear on your credit report, but if your spouse was added on as a joint holder, it’s more than likely it will appear on theirs as well.
Avoid damage to these accounts by:
- Removing your spouse as an authorized user
- Closing the account and reopening it in your name only prior to the divorce
- Paying off all debt
- Freezing the account
By failing to complete one of the following, you may risk your (former) spouse running up a balance which will show up on both of your credit reports. Creditors are concerned with balances being paid off, not the person paying them off.
- Divorce expenses result in even further debt:
Divorce isn’t cheap; it’s important to keep this in mind before hiring a lawyer such as our divorce lawyer in Massapequa. Luckily, there are ways to make divorce debt a little more bearable.
- Use marital assets to pay off existing debt such as the house or cars
- Worst case scenario, your spouse refuses to sell these joint assets. If they decide to continue living in that residence, for example, they should refinance the mortgage in their own name which will absolve you from that financial responsibility.
- Create a payment plan/budget and stick with it
- Increase your income and decrease your expenses to risk the financial toll. Control and track your sending. Educate yourself about finances. The way you’re living now pre-divorce may not be possible post-divorce, therefore it’s best to adjust to these changes as soon as possible.
Divorce can be ugly, but it doesn’t have to be with the right precautions. After the divorce is finalized, you can rebuild your credit. Once you’re freed from joint accounts, you can open ones in your name and only your name. With time, if you wish, you can reopen accounts with previous creditors.
Keep in mind that it’s best to maintain a civil relationship with your ex to steer clear of financial suffering. For more information or any further questions, contact our divorce lawyer in Massapequa.