If you are going through a divorce or feel that filing for one may just be around the corner, you are likely aware that doing so can take a significant financial toll on you. This is true whether you have significant assets at stake or not. However, you can protect yourself — and your bank account — by being prepared.
Many people are not prepared and learn some very difficult lessons when they find themselves buried in debt or unable to qualify for a loan. Taking some time now to assess your financial situation in terms of your credit could help you avoid some messy complications in the future.
One critical step you can take in protecting your financial well-being is to collect and keep records of all your financial accounts, shared and individual. Doing so can help identify any underhanded transactions your ex may make out of bitterness or spite. Failure to do this could leave the door open for wild spending by your ex which, when done with joint accounts, can affect your financial situation dramatically.
Opening individual accounts can also be a wise move. This can mean a credit card in only your name or a checking account. Having your own accounts allows you to establish or build a credit history and have access to funds if joint accounts are frozen. However, it is important that you not mistake hiding money for protecting yourself.
Finally, staying current with your financial responsibilities will be essential. If you have been ordered to pay child support or agreed to make mortgage payments until the divorce is finalized, it is wise to make these payments in full and on time. Otherwise, you (and your ex) could face harsh court penalties and steep fines. In this same vein, you will also want to make sure your ex is keeping up with his or her financial obligations in regard to shared accounts.
Bad credit or lack of a credit history can result in serious damage to your credit score, which may not be cleared up for a whole decade. In addition to discussing your assets and economic goals with your attorney, you may also want to consider speaking with a financial planner who can help you make decisions that minimize costly financial mistakes.
Source: The Huffington Post, “The 5 Nastiest Credit Surprises for Divorcing Couples,” Nov. 18, 2015