Divorce is never easy financially, but an angry or simply irresponsible spouse can make it even worse by ruining your credit. Even a well-meaning ex-spouse can hurt your score by missing payments as she struggles to adjust to a single-income household, or you can hurt yourself by overestimating your own income. Fortunately, there are some steps you can take to make sure your credit emerges unscathed from your divorce.
Kenny Leigh and Associates is a family law firm with offices throughout North and South Florida that represents men only. Kenny Leigh and Associates has offices in Jacksonville, Fleming Island, Gainesville, Daytona, Fort Walton Beach, and Boca Raton, Florida.
Budget, Budget, Budget
While most people fear the damage their spouses can do, they often are the ones hurting their own credit. During and after your divorce, you will likely face an adjustment period as you get used to living on your income alone. In addition, child support and alimony payments can make budgeting difficult but can hurt your credit if you are late or do not pay. It is a good idea to work out your post-divorce budget well in advance to make sure that you can afford your new situation.
To do this, first figure out your fixed expenses like housing costs, utilities, support payments and transportation. Remember to factor in your debts and other obligations as well. You will still need to pay your credit card bills and student loan payments after your divorce. You may need to adjust your expectations a bit. If you're used to living in a big home or driving a brand-new car, you may have to make some tough choices initially. Err on the side of caution when creating your budget. You can always adjust it later.
Watch Your Joint Accounts
Joint accounts are a complicated subject, but they have the potential to do a lot of damage. In theory, neither spouse should remove money from joint accounts or make purchases on joint lines of credit during a divorce. However, if one or both of you choose not to follow those guidelines, it can make a mess out of your credit report that can take years to fix.
The first step when figuring out joint accounts is to consult with your divorce attorney in Gainesville or at one of our other offices to find out what you can and cannot do. If you are worried that your spouse may try to take advantage of your joint accounts, see if you can have them frozen. This means that the money or credit will still be accessible, but it will require permission from both spouses. Depending on the financial institution, there may also be options for setting a limit on withdrawals or charges. This can help if you need money for everyday spending but want to protect your assets.
During your divorce, it is usually best to try to close or separate as many joint accounts as possible. However, in some cases, the financial institution may not be willing to remove one spouse from the account. This is common with larger loans, such as mortgages and car loans. If this happens, it is important to clearly lay out responsibility for the payment and to discuss what will happen if the responsible party is unable to make the payment.
If you do still have joint accounts after your divorce, be sure to monitor them carefully. You can request regular account statements in order to make sure that payments are being made. If you find that your spouse is not upholding her end of the bargain, contact your divorce attorney Gainesville to find out how to proceed.
Make Sure All of Your Joint Accounts are Settled
This is especially necessary if you are divorcing after a long marriage. You may have to do some digging to make sure all of your accounts are closed. It is easy to forget about a store credit card or a line of credit you opened at your doctor's office, but leaving those open can come back to haunt you. It isn't uncommon for a desperate or angry spouse to run up a bill on a long-forgotten account, or even to forget that you are on that account. You might not even realize it until you start getting collection notices or see your credit score drop.
To find all of your lines of credit, request a complete credit report. They should be listed on it, and you might be surprised what you find. Your divorce attorney in Gainesville or at one of our other offices can help you close those accounts.
By following these simple guidelines and the advice of your divorce attorney in Gainesville, divorces don't have to ruin your credit. Kenny Leigh and Associates has locations in Jacksonville, Daytona, Boca Raton, Fleming Island, Fort Walton Beach, and Gainesville, and we serve all of North and South Florida.