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Managing Divorce Finances and Your Credit Score

credit, Kane County divorce attorneyIt is not uncommon to experience credit issues or other financial problems in a divorce. Many people, however, are ambushed by the true scope of such issues and, as a result, experience serious difficulties. If you are just beginning to go through a divorce, or if you have been experiencing financial problems even before your divorce begins, you may need to take steps to ensure that things do not get worse.

Take Steps Before You File

If at all possible, it is generally a good idea to do what you can to ensure your finances remain stable even before beginning divorce proceedings. The first step that should be taken, if you and your spouse remain on good enough terms, is to work together collectively to minimize or eliminate as many marital debts as possible, as well as to close or freeze joint accounts. Illinois law holds that debts acquired by either spouse “subsequent to the marriage” are classified as marital property, meaning that when your assets are divided, your debts will be as well. This can sometimes lead to you being on the proverbial hook to pay off a debt you did not incur.

It sounds somewhat counter-intuitive, but it may also be wise to open a new credit card solely in your name, and either leave the account alone or make small purchases and pay them off immediately. While many may not see this as an appropriate time to open a new credit card, it can actually help your credit to do so, because it reflects well when someone has access to credit that they either do not use or pay off promptly. Also, opening the card in your name only gives you access to a line of credit that your spouse cannot use. If you and your spouse have a tumultuous relationship, this can be a financial lifeline.

Document Everything

Regardless of the nature of your relationship with your soon-to-be ex-spouse or the amount of marital property to be divided, it is absolutely critical to document every financial transaction you undertake during the period of the divorce. This includes routine deposits in your own accounts or payments on shared bills like your mortgage. For example, if you have to pay bills that should be the obligation of your spouse, they should be paid, but by documenting the transaction, you would have recourse to demand recompense.

It may seem overly cautious, but being able to readily cite financial information can help safeguard your personal assets as well as your credit. Illinois law holds that a person’s non-marital property automatically goes to them, and if you have intangible assets like stock options or other financial instruments, showing they are yours exclusively can save you considerable time and money.

An Experienced Divorce Lawyer Can Help

During a divorce, you have a lengthy list of issues and concerns to address, but if it can be avoided, your credit score should not be part of that list. If you have questions or need help in determining how best to safeguard your credit during divorce, contact an experienced Kane County divorce attorney. Call 630-377-7770 for a free consultation at Bochte, Kuzniar & Navigato, P.C. today

 

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6100000&SeqEnd=8350000

http://www.ilga.gov/legislation/ilcs/documents/075000050K503.htm

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