You’re stressed to the max and on top of everything, you have to make sure your finances don’t become a major problem also.
When you separate or divorce your spouse you need to protect your money and financial future and much and as soon as possible. It’s up to you to keep your finances and credit intact during the divorce process.
Protecting Your Credit During Divorce
1. Don’t Co-Sign Loans:
Don’t agree to become a co-signer for any loan with your soon-to-be ex-spouse. This will put you at risk of being held responsible for any debt that may be incurred.
2. Monitor Your Credit:
Make sure to monitor your credit score and credit report carefully during and after the divorce. You can use a credit monitoring service to keep tabs on any changes or activity on your credit report.
3. Separate Your Assets:
Make sure to clearly separate all jointly owned assets during the divorce process. This will help to ensure that both parties are held responsible for any debts associated with the jointly owned assets.
4. Negotiate Any Debts:
Try to negotiate the division of any debts during the divorce settlement. This will help to ensure that both parties are held responsible for the debts they agreed to pay.
5. Get Professional Advice:
Seek professional financial advice if you are experiencing financial difficulty or are unsure of how to manage your finances during the divorce. A financial professional can help you to make informed decisions that will protect your credit going forward. A financial professional can help you to make informed decisions that will protect your credit going forward.
6. Think before you use your credit cards
If you’re still using credit cards during your divorce, be wise about how you use them. Try to pay all of your credit cards on time, or at least make the minimum payments towards the balance. Don’t max out credit cards if you have large legal bills or other expenses that are divorce-related. A large portion of your credit score is based upon the credit card debt that you have. An individual with a high credit score will have low credit card debt. You’ll want to avoid any of your accounts from going to collections.
7. Refinance whenever possible
One of the biggest hurdles during divorce negotiations revolves around major assets, such as mortgages and vehicles.
While a divorce may award a home or vehicle to one spouse, that alone does not remove the responsibility for repayment if your name is on the loan — creditors can still come after you if your ex is awarded the home and she falls behind on mortgage payments.
For this reason, it is crucial that you try to have any joint loans refinanced to remove your name from any debts awarded to your ex so your credit will not take any hits should she run into financial trouble years down the line.
Even though it can often be challenging to refinance mortgages or car loans from dual- to single-income ownership, the potential credit problems associated with remaining liable mean you should do everything in your power to get your name off of any major debts.
Getting divorced may take all the emotional resources you have for a challenging season in your life, but it doesn’t have to waylay your entire financial future. Use these tips to help protect your credit rating and make the future a little easier to navigate.
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