Your ability or inability to borrow money may impact your life after divorce. Your credit score can dictate whether you can get credit cards, car loans, or take out a mortgage. While divorce does not automatically lower your credit score, what happens during the process could. You must be careful to monitor your credit and protect yourself from unwanted debt during the divorce. Both vigilance and hiring a lawyer early in the process could keep you from emerging from the divorce in a financially compromised position.
What You Can Do to Protect Your Credit Score?
You may not be in complete control over your credit score. Your credit may be dependent on whether your spouse can make payments. To avoid a situation where your spouse can harm your credit, you should try to cancel joint credit accounts. However, you may have a balance in these accounts and cannot quickly close the account. One potential solution to protect your credit is to transfer a portion of the balance to each spouse in a new account.
At a minimum, you should contact your creditors to explain the situation. If you agree with your spouse, you should switch joint accounts to one spouse’s name while the divorce is pending. If your spouse is responsible for making payments on an account in your name, you must check whether they have done so as the due date approaches. You may have to pay yourself to protect your credit and then seek a court order for your spouse to reimburse you.
During the divorce process, you should be as vigilant as possible. You should check your credit report often to see if there is anything unusual. Knowing what is happening quickly may make the difference as you take quick action to protect your credit score.
An Amicable Divorce Can Help Protect Your Credit
Protecting your credit often depends on an amicable divorce process. You may reach an interim agreement that will allow you and your spouse to safeguard your credit scores while the rest of the issues are being resolved. Conversely, a vengeful spouse may be able to do several things that can harm your credit.
New Jersey uses the laws of equitable distribution in divorce cases. These principles apply to marital assets and debts incurred during the marriage. It is possible that you could end up with your share of marital debt if you had a joint account or co-signed on your spouse’s account. It does not matter who took out the credit. The court will look at what it believes to be a fair way to divide marital assets and debt. If the court assigns you a large proportion of the marital debt, it could lower your future score.
Make Smart Financial Decisions During the Divorce Process
Finally, you need to make smart financial decisions during the divorce process. Preferably, you should avoid taking out large amounts of new credit during the divorce because it alarms lenders. In addition, you should be careful about how much of the joint debt you accept in the settlement process. It would be best if you did not try to do your spouse favors because it will likely harm your situation. If you take on too much debt, you may be unable to borrow money.
Metuchen Divorce Lawyers at Wiley Lavender Maknoor, PC Can Help You Protect Your Assets and Credit Score in Divorce
If you are seeking a divorce and have questions about your assets or credit score, contact our Metuchen divorce lawyers at Wiley Lavender Maknoor, PC. Call us at 732-494-6099 or contact us online to schedule a free consultation. Located in Metuchen, New Jersey, we serve clients in Middlesex County, Monmouth County, Union County, and Somerset County.