The Effect of Divorce on Your Credit History

Your credit history follows you during your entire life. Make sure you have an attorney who takes care of financial issues during your divorce proceedings.

Divorce is hard in every aspect; physically, emotionally and especially financially. Though divorce is a financial burden for both men and women, the effects of ending a marriage can differ for husband versus wife. If you are going through a divorce or a divorce is in the future, it is a good idea to know what you can expect with your financial situation and credit.

It is common for marital debt to accumulate during a marriage. You purchase a house, a couple of cars, you accumulate credit card debt and more. When the marriage begins to dissolve, it is a good idea to begin to get the financials of the marriage in order. The more that’s taken care of ahead of time, the easier the transition will be into the divorce proceedings and starting your new, single life.

Splitting marital debt can be a tedious task. The courts will view the debt as both party’s responsibility to pay back the debt, no matter who’s name the debt is in. Most credit card debt is typically split half and half and it is advisable to follow the steps outlined in Credit Sesames article, “Credit Card Debt & Divorce: 5 Steps to Protecting Your Credit From Divorce.”  You should also get a copy of both credit reports to see what creditors are named, whose name is listed with the debt, and how much is owed.

Consider closing or freezing any accounts you have been ordered to pay. Many jilted spouses take advantage of the fact that you were ordered to pay a debt and may continue to use the credit card and run up the bill. On the flipside, if your ex-wife was given an order to pay the debt of a credit card, if she is bitter, she may decide to forgo paying it in order to ruin your credit.

Talk to all your credit card companies as soon as possible and have your name removed from the accounts. You may want to open your own line of credit with the company to help keep your credit score in good standing.

Joint bank accounts are another way men can lose big chunks of money. You should see to it that you remove half the money in the account and put it in a separate account to protect it, and speak to the bank about freezing the account or closing it. Since it is a joint account, you won’t legally be able to remove all the money, but taking half will prevent your spouse from going in and cleaning out more of the money out than she should, or having continued use of it.

Another way to help prevent credit damage is to get any automobiles listed in both names, signed over to the other. Have your ex-spouse take out a loan for the car in her name. If she refuses, this will make it difficult so that you will have to make a conscious effort to pay attention to the loan and how it is being taken care of.

Protecting your credit is crucial in a divorce. Be sure your divorce lawyer makes provisions for penalties on unpaid or delinquent payments. If your ex-spouse misses a payment or is delinquent, there needs to be consequences, and many times this can help prevent the desire for her to skip or be delinquent.