Step Six: Take Care of Joint Credit Accounts
Before you separate close all joint credit accounts if possible. Closing them before divorce proceedings will keep an angry spouse from using the account and running up charges for which you may later be held responsible.
Offer to close the accounts by paying a smaller amount than is owed. If this is done, get a letter from the creditor that the account has been paid in full and a written promise that they will not file anything derogatory about the account to the credit reporting agencies.
If you are not able to pay off the balance owed or come to a settlement agreement, you should have the accounts frozen. This will keep you from being able to use the account but will also protect you in the end. Once the divorce is final, the balance owed on the account can be transferred to the party the court holds responsible for the debt. If the responsible party does not pay the debt, you don't have to worry about it affecting your credit score.
Contact and alert creditors to the fact that you are going through a divorce. If there is a change of address, make sure they know it so that you will continue to receive bills from all joint accounts.
Make sure all credit card bills are being paid. Divorce proceedings can take months, and all it takes is one late payment to hurt your credit. Even if you have to pay the minimum on accounts that you know will ultimately be your spouse's responsibility, it will be worth it.
Step Seven: Avoid Additional Debt and Major Purchases
Before and during divorce, you want to be conservative with finances. If you're unhappy in your marriage, for goodness sake don't build a new house or put in a new pool. You want to simply your financial situation, not make it more complex.
During divorce settlement negotiations or divorce court, one of the major issues will be deciding who is responsible for what debt. The less complex the debt situation, the easier this task will be.
There are exceptions to this rule. If you have no credit in your name and no car, you may need to buy a car before the divorce because you may not have sufficient credit on your own afterwards. It's always wise to get advice from your attorney on such issues before going forward.
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