PROTECT YOUR CREDIT IN DIVORCE TO PROTECT YOUR FUTURE
Divorce is often a difficult season to walk through, especially when you are a working professional. Still, with careful planning and a willingness to keep matters amicable, you can land on your feet on the other side.
One of the most common ways that a divorce can cause trouble for a working professional in Southern California is the transition from two incomes to a single income, and the strain it can place on your credit.
Orange County offers many wonderful advantages, but they come at a premium price tag, and you must think ahead to make sure your single income can keep the wheels on the wagon. For many reasons, it is always wise to remain clear-headed and avoid risky financial behavior during your divorce.
You will thank yourself every day once your divorce is final if you keep your divorce from affecting your credit, or your spouse’s for that matter.
You certainly do not want to create strain on your professional life by mishandling your personal matters. Furthermore, it is possible that your spouse may negatively impact your credit and future single-income budget if you are not careful.
While it may seem unfair, many employers look at credit ratings when considering a candidate for some position. It would be a shame if the stress of your divorce cost you employment later on!
Act quickly to protect your credit
First, you need a clear picture of your financial life. Depending on how long your marriage persisted and the way you and your spouse handled finances, it is possible that you are both liable for certain debts.
These might be large things like a mortgage for a family home, or a car note. They might also be consumer debt like credit cards. It is even possible that your spouse opened lines of credit in your name without you knowing.
A good place to start is getting a copy of your credit report. There may be some accounts itemized that you don’t know about, or have possibly forgotten. While a credit report is not a foolproof way to find all of your liabilities, it can be a good jumping off point.
It is rarely easy, but you need to separate and close out as many jointly held accounts as you can. This serves two purposes — first, it minimizes your liability for your spouse’s financial choices, and vice versa. Second, it helps you prepare for operating on a single-income budget.
Some debt may be unavoidable
Debt is marital property, just like your savings account or other property you acquired during your marriage. You may have to assume responsibility for some of your partner’s debt in your divorce settlement, and you should prepare for this possibility.
It is unlikely that you will emerge from your divorce without any debt at all, but this is still preferable to finalizing a divorce while still sharing joint liability on a line of credit, utilities, a mortgage, or some other liability.
It is crucial to ensure that you and your spouse are truly separated when you divorce. Otherwise, if your spouse fails to make a payment on time, it may affect your credit rating. Similarly, if you hit a rough patch and can’t make a payment, your spouse may pay the price. It is far better to cleanly separate as soon as possible.
Don’t face divorce alone
Divorce always holds the potential for disaster, which is why it is never wise to approach it alone. You are much more likely to make wise, successful choices that benefit you in the future with proper legal counsel.
An experienced attorney can help you create a plan for a successful divorce and how to land on your feet on the other side. With appropriate guidance, you can keep your credit clean and your rights protected while you prepare for a fresh start and a new season.
Source: Nov. 30, -0001