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Being vigilant about credit in a divorce

| May 18, 2020 | Blog, Divorce | 0 comments

In New Jersey, those getting divorced will need to rely on their credit in order to begin their life anew. They cannot afford to have it wrecked in the divorce. However, if a person is not careful, they could be left with a credit score that can decrease by as much as 50 points.

It takes some planning and forethought to keep a credit score up throughout the divorce because there are numerous pitfalls that can arise. Divorce itself may not sink credit, but being saddled with a disproportionate share of the couple’s debt will harm the credit score. The first step to avoiding this is ordering credit reports from each of the three major bureaus to get a handle on which accounts are shared with the spouse. Then, it makes sense to quickly close out all joint accounts. A person may want to pay their share of the debt early so that their credit is not affected.

Then, it is critical to have a conversation with the creditors to alert them of the situation. While it will not relieve someone of the responsibility for debt incurred in a joint account, it could tip them off to be alert for any sudden charges. Finally, a person should consider placing a credit freeze on themselves if they are worried about their spouse’s ability to harm their credit.

An individual who is worried about their debt situation may want to consult with a family law attorney to find out how best to protect themselves while the split is in process. The attorney may be able to help their client negotiate a divorce agreement that leads to a reasonable split of the debt that is in place. Otherwise, someone may have to worry that they are being stuck with debts they did not incur but still have to pay.