What Happens to My Credit Rating During Morristown Divorce?
During any divorce, the key divorces issues of child custody and parenting time, child support, alimony, and the division of marital assets and debts can take up the majority of your time, focus, and energy. Given the importance of these issues, it is certainly understandable to focus heavily on them however one important issue which often doesn’t get enough attention or consideration during divorce is your credit rating.
Since some of the most important things we do in our lives are done by borrowing money (purchasing a home, buying or leasing a car, going to college), it goes without saying that building and maintaining a solid credit score is an important part of our lives.
Not only can issues with joint credit cards and jointly-owned debt affect your own personal credit rating, they can continue to do so even after your divorce has been resolved. In today’s article, our Morristown divorce attorneys will discuss what you can do to protect your credit rating during a divorce, repair damaged credit ratings, and how we can help you protect your financial interests and concerns, including debt consolidation and protection from black marks on your credit score throughout the divorce process and for years to come afterwards.
Madison Divorce Debt Division Lawyers – “Check Your Credit Score”
If you are going through a divorce, a very prudent step to take is to check your current credit report. Credit reports can alert you to red flags like unknown expenditures (is your spouse purposely running up your cards?), forgotten debts, and at the very least give you a snapshot of your pre-divorce credit rating.
Credit reports can be obtained for free (once yearly) at FreeCreditReport.com and through other similar services, or can be checked at any time for a nominal fee through credit agencies like Experian and Equifax.
Randolph NJ Complex Asset Divorce Lawyers – “Close All Joint Lines of Credit”
Perhaps even before checking your credit score, closing joint credit cards or other lines of joint credit may be a good step to take once your divorce has been filed for.
Preventing any further marital debts from being incurred during a divorce can help simplify the equitable distribution process, and worse-case-scenario prevent your spouse from, for any reason rational or otherwise, overloading your joint credit cards and putting your own credit score in jeopardy.
Of course, before you close joint credit cards or credit lines you should first discuss this with your divorce attorney, as the facts of your case may dictate the necessity for leaving those joint credit lines open. In addition, if your spouse is the one to call the credit company and close the account, make sure you request and receive confirmation of its closure in writing.
Equitable Distribution and Marital Debt Mount Olive NJ – “Pay Off as Much Debt as Possible”
As discussed in our “credit card debt and divorce” article, many people are unaware of the fact that even though their divorce agreement states one spouse or the other is responsible for the repayment of certain marital debt, many lending agencies are not bound by court orders (such as mortgage lenders), and are free to pursue either party for repayment of these loans.
Again, this reason in particular is why, when possible, many divorce attorneys will recommend that the divorcing couple uses any liquid funds they have to pay-off as much jointly owned debt as possible. These funds often come from things like joint savings and checking accounts, or from the sale of marital assets such as a family home or a family-owned business. There is even the possibility that the couple refinances their home as part of their divorce settlement, and uses these funds to pay off marital debt.
By paying off marital debt during the divorce process, each party protects themselves and their own credit rating from being affected by any future actions (or inactions) of their former spouse.
Protecting and Rebuilding Credit Score after a Morris County Divorce
Now that you have effectively managed credit during your divorce, and divided and paid off much or all of your marital debts, it falls to you to protect your individual credit rating, and begin rebuilding your credit score if necessary.
First and foremost, if your credit report is based mostly on your former marriage’s spending and credit, its time to start building your own personal credit history. Pay for some things on credit, even if you have the money, and make sure to pay your credit card bills on time, and in full (even better if you can just put them on auto-pay).
If you, your former spouse, or both, financially overextended during the marriage and your credit rating suffered as a result, one of the best ways to repair your credit score is to keep your credit cards below 30% of the borrowing limit. Even if you are overextended on one card, keeping another card below this 30% mark can give you points in your favor, and help rebuild your credit score.
In either case, our attorneys always recommend that our divorce clients speak with a financial planner of some kind. While this is in-part to help us better negotiate things like child support and alimony as part of your divorce, it is also of course to help you budget your post-divorce life, and understand your financial obligations and options moving forward.
Contact Our Morristown Divorce Asset Division Attorneys Today
At Jacobs Berger, our attorneys have extensive experience helping clients to fairly and effectively resolve their divorces and all related issues in towns across New Jersey and Morris County, including Morristown, Madison, Randolph, Dover, Mt. Olive, and the surrounding communities.
Our unique approach to family law centers around creating family life plans out of family law problems. Not only do we aim to represent our clients to the best of our abilities, we also aim to protect the financial and emotional stability and future of the entire family in the process.
To speak with our legal team today in a comprehensive and confidential case assessment regarding your divorce, any of its related issues such as child custody, child support, alimony, the division of assets, or any other family law matter, please contact us online, or through our Morristown office at (973) 710-4366.