For starters, make sure to close all joint accounts and be sure that you have a credit in your own name. You can try visiting a credit consultant but I bet you they’re also going to suggesting the same thing.
Divorce is not ideal. Specifically, those marriages that ended past the age of 50. There’s this emotional challenge that you have to deal with. Like having a failed relationship at this time and age, starting over again as a single person, dating, and of course, financial issues to settle.
While you’re trying to sort out who’s getting what, it’s imperative that you’d be able to be financially stable and not to be burdened by your former spouse’s debts.
Here are some of the ways on how and what you can do to protect your credit during a divorce:
1) Know your responsibilities
Truth is, divorce doesn’t count when we’re talking about the responsibility of paying off your debt. For example, if you co-signed a credit loan with your spouse and he/she took over the loan, legally, you still can’t escape the responsibility for any debts he or she incurs on the card. If your ex wasn’t able to make payments within the due date, this will have a huge impact on your credit score with the possibility of having to go to court. It’s easier to maintain a good credit rather than having to repair it.
Generally, a divorce will not have any effect with the agreement between you and your lender or card issuer. Well, it makes sense because your divorce will not show up on your credit report. What you can do is to go over every joint account or credit card then cancel it. Make sure to transfer the remaining balance to the card of who ever is going to assume the responsibility for paying the debt.
2) Close joint accounts, ASAP!
It’s a proven fact that joint accounts are managed by you and your spouse together. Which means that both of you are equally responsible for any debt, no matter how it is settled during the process. An open account can cause you problems. If left open, your ex can add more debt, make a late payment, miss a payment or default. if you and your spouse are getting separated, protect your finances to keep your credit in good standing.
3) Get a credit card and checking account in your OWN name
It really depends on how bad your divorce is but there’s always a chance that your spouse might do something to ruin your finances, commonly, draining a checking account. One way to prevent this is to open your own checking account in your own name and start depositing your pay stubs into that account.
Moreover, you’ll probably want to open your own credit card account after closing all the joint ones. If you haven’t had the chance to build your own credit, you can start by applying for a low-limit card and slowly increasing the limit as time goes by.
4) “Freeze” out existing credit files
Some spouses can be very spiteful. There are also some that will intentionally abuse your credit accounts and may show a vengeful streak. A quick fix of putting your card on freeze or having a fraud alert on your account can be effective damage control.
These actions will “freeze” your credit files and prevent your spouse from using your Social Security number or to open new accounts in your name.
Sad as it is but divorce is more than putting a marriage to an end. It also requires splitting up the finances (or properties) between you and your spouse. It will be much better if you’re able to take care of your credit and debt issues with a good financial plan and most importantly, a clear and cool head.
We’d love to hear your thoughts in the comment section below. You can also learn more about Credit Repair Now Canada here.