Most couples agree that the most overwhelming and stressful parts of a divorce have to do with handling their bank accounts, debts, assets, and other money issues. Especially for couples that have joint accounts and years of mixed financials, divorce can be confusing and hard on your wallet. During the process of separating your money and settling debts, it is extremely important that you are aware of your credit situation and that you protect yourself from beginning your new life with bad credit, damaged credit, or no credit.
Here are four steps you should take to protect your credit during a divorce:
1. Immediately request a free credit report. A credit report will help you see a list of your open accounts as well as a comprehensive list of your debts. Check the report for errors and sit down with your spouse if possible to review the document. If you believe your spouse may attempt to get a loan in your name during the divorce, you may also consider a credit monitoring service. To retrieve your free credit report, visit the Federal Trade Commission - Consumer Information website. You can receive one free credit report each year.
2. Close or freeze joint accounts as soon as possible. Bank and credit cards accounts should be closed, and if they cannot be closed, they should be frozen. Don’t be afraid to call banks and companies to explain your situation and ask for assistance.
3. Consider using joint assets to pay off joint debts. Cancelling out debts with your shared assets can save you the trouble of figuring out both situations. If debt still remains, be certain that you have a clear agreement on who is paying the debt and when. If the debt is joint and your ex doesn’t pay, it can still affect your credit score even after the divorce is final.
4. If you don’t have one, open a personal bank account. Set up a personal checking and savings account in your name and begin to keep your money there. Also get a credit card in your name if you do not already have one, as making regular purchases and payments can help build your credit.
To learn more about what steps you should take to protect your finances, contact the Law Offices of Molly B. Kenny at 425-460-0550 to set up an appointment.