Protecting Your Credit During Divorce
Christmas is four days away and that seems like a good time to talk about protecting your credit in the midst of a divorce. Why? Christmas is the most expensive holiday and money is the leading cause of divorce. So it’s not the cheeriest topic, but everyone must know during and after divorce how to look out for their own credit history. Divorce is a notorious wrecking ball for a credit report, but here are a few tips to help:
Debt is not divided like assets. This may seem like a no-brainer, but The Oregon Divorce Blog says the following:
“A common myth we come across in our practice is that the court has the power to protect a client’s credit if the ex spouse doesn’t pay an obligation they were ordered to pay under a divorce decree…If you and your spouse signed a legally binding contract with a creditor, the divorce decree cannot protect you from the creditor. You both signed a binding contract with the creditor (for example: Citibank, Countrywide, American Express), and that contract survives the divorce decree and remains an obligation of both parties, no matter what the divorce decree says.”
Obtain credit reports at the beginning of your divorce case. This is a reference point for the remainder of the time you are cleaning up your joint debt.
Try to pay and close out all debts beforehand. If you cannot do so, make arrangements for you and your spouse to each make monthly payments. Follow up and ensure that this is being done. If the spouse fails to hold up their end of the bargain, pay both shares of the debt and seek reimbursement through the court system. Also try to include a clause in the final judgment stating the legal options available to either spouse if the ex fails to pay their share of the debt.
And on that note, happy holidays!
