By Evan Vitale
Let’s continue with our second part of our two-part blog series on how to handle and maintain your credit during a divorce.
In our first-part, we shared some thoughts and steps you should take involving joint bank accounts. Now, here are some other items that you should consider that will help you protect your credit during a marital split.
If you have any loans, such as an auto loan, you’ll want to make sure your name (or your spouse’s name) is removed from any joint auto loans. If you’re retaining the car, then the loan should be in your name. However, if you are not able to retain the auto, then you’ll want to make sure your name is removed from the loan, so you’re not obligated.
If there is a house, then this could become a little more sticky as it’s not as easy to drop a person’s name from the mortgage. Usually, if a person is going to keep the house, they will need to refinance the home in just their name (thus, removing the other person from the loan). If this is not possible, then it’s better to sell the house and split the profits (which protects everyone). Of course, there are many horror stories of credit disaster as both names are on the mortgage and the loan is never paid, resulting in foreclosure and destroyed credit.
Once all joint assets have been dissolved, liquid assets (with the help of an attorney) can be divided along with any remaining cash.
You will also need to notify all creditors and banks of your divorce. If a collector is calling on a debt that you are not legally responsible for, you will want to let them know that you are no longer married and therefore no longer responsible for the debt. You might also want to notify them in writing.
Finally, when you feel everything is dissolved and the matter is closed, keep an eye on your credit. Check it regularly. Many times, people are later surprised when something pops up on their credit report that didn’t belong to them and now a credit repair needs to be done. Catching it early rather than later is going to be much better for you and your credit in the long run.
Divorce is a very difficult time, so you definitely don’t want to have credit issues and hassles along the way. Work with your attorney, your banks, your credit cards and loans to solve these matters as soon as possible.