Filing for divorce comes with determining a number of incredibly important financial matters, like how you will divide your shared assets and whether or not alimony is necessary. However, one thing you may not have considered is the impact of filing for divorce on your credit score. Unfortunately, many people realize the importance of this matter once it’s too late and their credit has already been impacted. If you’re filing for divorce, this blog explores what you should know about these matters and the importance of working with a Long Island property division lawyer to guide you through these matters.
Will Filing for Divorce Impact My Credit Score?
First and foremost, it’s important to understand that filing for divorce will not inherently appear on your credit report or directly impact your score. However, what happens during your divorce could impact your credit score. This is because debt, much like assets, is divided according to the state’s equitable distribution process. As such, the court must determine how to divide marital debts, often by examining which party benefited the most from certain debts.
You should also note that, unfortunately, one party may attempt to intentionally incur as much debt as possible before these liabilities are divided. This is often referred to as marital waste, and your spouse can be held solely responsible for the debt they accumulated during this period.
What Can I Do to Protect My Finances?
When divorcing, you’ll have several important considerations to make about your future. However, you should also understand that there are steps you can take to help shield your credit during these matters. Generally, the first thing you should do is remove yourself as an authorized user from any cards in your spouse’s name and remove your spouse as an authorized user on any of your cards. This can help reduce your liability for debts they’ve accrued.
Another step you should consider is placing a fraud alert on your credit report. This can help if you have reason to believe your spouse will open new accounts in your name before the divorce is finalized. By placing a fraud alert on your account, creditors must verify your identity before opening new lines of credit in your name.
Finally, if you have joint debts on a shared credit card, you may want to consider closing the account. However, you can only do so if you both agree to close the account, and the balance is $0. As such, you should consider paying off the remaining debt by splitting the balance and transferring it to your individual cards before closing the account.
When facing matters like child custody and property distribution, protecting your credit score may not be at the top of your priority list during your divorce. However, taking the time to shield yourself in these matters is critical. That is why it’s in your best interest to connect with an experienced divorce attorney with the Law Offices of Jay D. Raxenberg, P.C. We understand how complicated these matters can be, which is why we will do everything in our power to help you start the next chapter of your life on the right foot. Contact us today to learn more.
