There’s one reality that many divorcing couples find difficult to grasp: Divorce can have long-lasting effects on finances. That’s why it’s so important to maintain a comprehensive understanding of your financial situation during the process.
To a certain extent, the division of assets may be out of your control. You will come away with certain assets, and your spouse will get others—unless you have particularly strong prenuptial and postnuptial agreements.
However, there is one area where you will have some control. If one spouse manages assets poorly, there are certain steps that can limit the damage to the other spouse’s credit. The most common credit mistakes people make during a split arise from a misunderstanding of how the law and credit work. Below, we’ve listed three tips that can help divorcing couples avoid those common pitfalls and move into single life without losing credit.
If you are divorcing in Queens, it’s wise to invest in a family attorney who will aggressively represent your best interests during negotiations. At Elliot Green Law Offices, we are very experienced in New York family courts, and we’ve handled more than 100 cases. You can count on our experience and expertise during the divorce process.
To arrange a free preliminary consultation with a family lawyer from our firm, call us at 718-260-8668.
1. Don’t Assume the Divorce Decree Is Enough
As an example, let’s suppose a couple has two joint credit-card accounts. During the divorce, the court assigns the first account to one spouse and the second to the other. Now, imagine that one spouse pays the account in full during the next three years, reaching a zero balance.
This should reflect well on the credit score, right? Well, paying the balance in full should help the score, but if the other spouse defaults on payments and the account goes to collections, both spouses’ credit scores can suffer. In order to avoid this situation, Credit.com recommends speaking directly to a bank and finding a way to remove your name from the other account.
2. Refinance the Car Loan If Your Spouse Takes the Vehicle
The same situation can arise with a car loan, but there is an easy fix in this case. All you need to do is agree with your spouse to refinance any loans that are split in order to remove each other from the loan papers. Once complete, you will no longer be held responsible for your ex’s loans.
3. Think Twice Before Deciding Not to Sell the Home
Refinancing becomes more costly and difficult when it comes to a mortgage. As such, you should consider speaking to your spouse about selling the home and splitting the proceeds. That way, neither of you is stuck worrying about the other making the mortgage payment.
If you would like to discuss the specifics of your divorce with a Queens family attorney, please call us at 718-260-8668.
