Divorce is a difficult thing for everyone involved and can lead to financial difficulties and economic woes for all parties involved. At this point in the process of divorce, it is very important to preserve and keep a close eye on one’s credit report and maintain a good credit standing.
Anyone of a number of issues can lead to misunderstandings or miscommunication in this volatile and contentious period between former loving spouses. These miscommunications and misunderstandings can lead to oversight of bill payment or even overspending on the part of one spouse in the process of trying to set up an independent household. That is why it is so important that anyone going through divorce protect his/her credit during and after the divorce.
This plan of action will make essential information easy to find and help keep a precise documentation of all debt, payments, and responsibility for the debt. This simple plan can save time and expense when it comes time to go before family court.
Any secured loans such as home mortgages or car loans are secured by assets such as a home or car. Many experts believe that secured loans should be sold off to prevent any default or delinquency of credit to reflect on the individual later on. This may be more attainable than most people think given accrued equity in a mortgage or the amount paid in to the loan. If it is not feasible to pay the loan off, one spouse can offer to buy the other out of the loan and refinance the loan under one name, that way only one of the parties is r3esponsible for the loan and the payments to follow. If both names stay on the loan, it can lead to credit problems for both should one of the parties default or get hit with economic problems in the future.
An unsecured loan refers most often to credit cards and charge cards. These loans are not pledge against any assets but they can destroy a person’s credit if left unpaid or go into default. These loans or lines of credit have to be dealt with immediately. If an individual is only an authorized signer on the credit card, he/she should act immediately to remove their name from any association with use of that credit card. Any credit card that has the other spouse on as an authorized singer should be notified that the spouse is no longer authorized to use that card as soon as possible.
The most important thing that can be done to protect credit standing is to make sure any debt that shows an individual as a user or vested interest in the account should be paid on time. If the responsibilities of the other spouse are not being met, a detailed account of all credit payments and any short falls by the other party on the worksheet. This documentation can help when the court is assigning asset distribution.
An experienced divorce lawyer can answer any questions regarding protecting your credit during and after a divorce.