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Important Tips for Protecting Your Credit During Divorce


Divorce can be an expensive endeavor. Besides court and legal fees, divorcees can expect to face new financial obligations. As a result, a person’s credit is vulnerable during such stressful proceedings. However, there are ways to minimize the negative impact that divorce can have on your credit. Check out these tips to protect your credit during and after divorce proceedings.

Separate Your Financial Accounts

In many states, including Iowa, not only are marital assets divided upon divorce but so are marital debts. As a result, it is crucial for you and your spouse to separate your financial accounts. This essentially means separating your respective financial responsibilities. If you have joint bank accounts and credit cards with your spouse, you should close them. Be sure to open new bank accounts separately in your name. This can help you avoid racking up unnecessary marital debts.

You may also want to consider paying off joint debts using jointly owned funds. Another way to distinguish marital debts from separate debts is to consolidate the marital obligations. This can be done through things like balance transfers and refinancing.

Notify Creditors About the Divorce

Another essential way to minimize the consequences of your divorce on your personal creditworthiness is to tell your creditors about the divorce and establish a plan with boundaries concerning the repayment of debts.

When notifying your creditors, you could include a statement to the effect of “I do not intend to be responsible for new debts incurred after the date of this notice.”

By keeping your creditors in the loop, and cooperating with them about how to approach your financial obligations during and after divorce will demonstrate responsible financial judgment and planning on your part. You can request your lenders to convert your count to “inactive” to prevent the accumulation of new charges.

Keep Meticulous Records

One of the most important things that anyone who has gone through a divorce can tell you is to record and document everything. Most divorce issues revolve around finance, namely asset division, spousal support, and child support. By keeping comprehensive financial records, you will not only have a more intimate understanding of your developing financial situation, but it will also provide you with evidentiary support for litigation.

Check Your Credit Reports

After establishing a secure foothold on your finances, you should still monitor your credit history to make sure there isn’t any unexplained activity. Although inquiries can impact your credit score, you can benefit from requesting copies of your credit report from Equifax, TransUnion, and Experian. If you have not requested a credit report from those companies in the past 12 months, you may be entitled to a free copy.

Furthermore, you can regularly monitor your credit score without making a formal inquiry with one of the three major credit reporting agencies. Third-party credit reporters such as Credit Sesame and Credit Karma allow users to regularly track their credit score without adversely impacting their scores.

Freeze Your Credit

Hopefully, this will be an unnecessary step for most, but freezing your credit is a powerful way to draw boundaries when your former spouse is being less than cooperative. This helps prevent your former spouse from using your Social Security information to establish new lines of credit.

Although your former spouse would ultimately be culpable for making a fraudulent transaction, it is best to prevent such a mess preemptively. Freezing your credit files will make piling on new debts nearly impossible for your former spouse. However, be warned that doing so will also restrict your ability to access essential funds during divorce proceedings. That is why it is best to consider this as an act of last resort.

Request Intervention from the Court

If your spouse’s misconduct and irresponsible behavior are affecting your credit, you may be able to take legal action before a court of law. Courts have the authority to restrain your former spouse from taking any more steps that would adversely impact your creditworthiness. Furthermore, you can hold your former spouse liable for damages in particularly egregious cases of misconduct.

Consult Hope Law Firm for Experienced Legal Counsel

If you need more advice on how to protect your financial and legal interests during a divorce, you should get in touch with a skilled attorney at Hope Law Firm. We are dedicated to handling complex issues involving Iowa family law for Des Moines residents and their families.

Call Hope Law Firm at (515) 305-2772 or contact us online for an initial consultation about your case today.