Divorce Debt and Credit Tips
Divorce involves the division of assets and debts. Each party’s rights and responsibilities will be addressed with regard to the assets and debts in a final family court order or divorce agreement. While these issues should be addressed during the divorce process, it is important to understand that creditors are not bound by the final family court order or divorce agreement. Below are some steps to consider to protect yourself.
1. Sort out the accounts. As a first step during the divorce process, determine which account belongs to you, whether separately or jointly. Did you sign the credit application, either on your own or with your ex? If so, it is in your name and belongs to you. Whether it is your separate property or community property, you have responsibility for the account.
2. Review your credit report and close old accounts. Request a free copy of your credit report. You can do so online by visiting www.annualcreditreport.com. Review your credit report carefully for any joint accounts that have remained open during your marriage but have not been in use. You should consider closing any such accounts to avoid any new charges which could create problems during the divorce process.
3. Change the password on financial and email accounts that belong to you. During the course of the marriage, you may have shared your common password or logged in on a shared computer/device to access your accounts. At the time of divorce, as a precautionary measure, if it is your separate account, change the password, PIN number, and/or security questions/answers. Try to use security questions for which your ex would not know or be able to easily ascertain the answers.
4. Gather important documents and keep an updated file. While you still have access, gather copies of all important financial documents (e.g., bank statements, credit statements, loan/mortgage statements, retirement account statements, pay stubs, tax returns, insurance policies, home deed, automobile title, estate-planning documents). You will want to have records related to your assets and debts during the divorce process.
5. Seek Legal Advice: If there are assets and debts to be divided as part of the divorce, you should consider seeking legal representation to ensure that your rights are protected. The laws on divorce and the division of assets can be quite complex. An attorney, whether through the process of mediation or settlement-oriented litigation, can guide you and work out an agreement that is adapted to each party’s needs and concerns.