Protecting Your Credit After a Divorce

There are so many emotional issues that people deal with while going through a divorce that they can sometimes overlook financial issues that can have a negative impact on their lives. One of the most common is how divorce can affect your credit, even after the divorce becomes final. The following are some key steps you can take to help protect your credit before, during, and after your marriage has ended.

Credit Reports

Even if you haven’t yet filed for divorce and you and your spouse are still together, it is critical to understand the bigger picture of your credit and debts. Federal law allows everyone one free credit report each year, which can be obtained each year at annualcreditreport.com. You can choose from one of the three major credit reporting agencies, Equifax, Experian, and Transunion.

Your credit report will list all of the debts which are attached to your name and your spouse’s name, both individually and jointly. It is important to carefully examine the report, going through each entry to make sure there are no errors or discrepancies. Make sure to also check that there are no credit cards or credit lines in your name that have been opened without your authorization.

Monitor Your Credit Reports

Once you have pulled your credit report, it is still a smart idea to monitor if for any type of activity that you may be unaware of. Many people use a credit monitoring service that can alert them if their spouse is trying to open up any new credit cards in their name. These companies provide regular updates on a client’s credit score, as well as any changes or inquiries that come in.

If you have had issues with your spouse intentionally damaging your credit or opening up lines of credit in your name without your knowledge, consider putting a fraud alert or credit freeze on your credit files. This prevents anyone from opening up any new accounts using your name and Social Security number.

Joint Accounts

Any joint accounts that you and your spouse have should be separated, if possible. Debts should be paid off or the balance should be transferred to another card that is in either your name or your spouse’s name only. If this is not possible, then there should at least be a freeze put on the account so your spouse cannot incur any more debt on the account.

Before taking any actions, however, it is critical to consult with your divorce attorney because there could be legal ramifications from the court if an account you freeze is one that your spouse uses to purchase groceries or pay bills. Your attorney will know what steps to take in order to ensure that whatever additional debt your spouse does incur is not included in the final division of marital debt that must be determined by the court in the divorce.

Authorized User Accounts

It is not uncommon for one spouse to have a credit card in their name only but make their spouse an authorized user. This allows the spouse to have unlimited use of the card, however, any debt that is incurred is strictly the spouse whose name the account is under. If you are in this situation, remove your spouse’s name as an authorized user in order to protect yourself from them running up any more debt that you will have to pay for.

Refinance

Part of the divorce process involves the division of property and it is not uncommon for that property to have debt attached to it, such as a mortgage or vehicle payment. If your spouse ends up with property as part of your divorce settlement that has joint debt attached to it, it is important that there be a stipulation by the court that they need to refinance that debt as soon as possible.

Even though they may have been awarded the property, until they refinance, you will still have a legal and financial responsibility. For example, if your spouse falls behind in mortgage payments and your name is still on the mortgage, your credit will be severely impacted by these late and failed payments.

Call a Rhode Island Divorce Attorney for Help

If you are considering or have made the decision to divorce, call Kirshenbaum Law Associates at 401-467-5300 to schedule a confidential consultation with one of our skilled Rhode Island divorce attorneys.