Divorce is not easy. Even when it is an amicable split, divorcing requires numerous decisions and a process. This can quickly become emotionally taxing.
Property division is considered to be one of the most contentious issues of a divorce. Finances in general create many questions and concerns during dissolution. As such, it is important to gain a full and complete picture of the situation and the options you have.
Financial impact of divorce
Splitting assets in a divorce can feel like all of your financial accounts have been hit hard. In most cases, this is very true. Often, shared accounts will be split equitably. And if there are shared credit cards, steps are required to move forward with removing a name or closing the account altogether.
There is a focus on credit score, and this is for a good reason. Divorce has the tendency to cause a credit score to plummet. This could have a major impact on your post-divorce life, making it important to consider what could be done prior to divorcing to help protect your credit score.
Protect your credit score
The divorce process alone will not impact your credit score; however, the actions you take prior to and during a divorce could. Thus, the first step to take when deciding to divorce
Is to pull your credit report. This will help you understand which accounts are linked to your credit score, which accounts are joint and what, if any, credit cards have the other spouse added as an authorized user. These are the account to keep an eye on.
The next step to take is to separate your accounts as soon as possible. Because one could be on the hook for the other’s spending, it is best to close joint accounts rather than split the responsibilities. If necessary, the next step would be contacting your creditors, informing them of your change of status. This could result in negotiations to detangle the joint account with your ex-spouse.
Finally, the best way to avoid vindictive actions that could hurt your credit score significantly is to freeze your credit cards. This could help ensure new and large charges are not made.
Whether you are dividing assets, property or debt, it is important to gain a full picture of everything involved in the property division process. This helps ensure you take proper and timely action, understand your rights and protect your interests.