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Protecting Your Credit During Your Divorce

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A recent new article details the importance of protecting your credit during your divorce.
How To Protect Your Credit During Divorce
During a marriage shared bank accounts makes sense for many couples; however, it’s important to protect one’s credit following a high net worth divorce Property Division
As the vice president of a credit counseling organization explains, it’s not unusual for separating spouses to get caught up in their emotions and end up sabotaging their former partners’ credit and in that process to destroy their own credit as well..

She gave the true story of a man who as part of his divorce agreed to pay credit card bills for his wife and then intentionally failed to do so, thus ruining his former wife’s credit to make it significantly more difficult for her to obtain new credit cards, auto loans, a mortgage or medical care such as braces for their children’s teeth. Damaged credit can escalate estimates used to determine rates and deposits for leases, insurance policies and utilities, making life that much harder for both parents.

Drafting a budget to follow after the divorce is finalized is highly recommended even in high asset divorces where newly single individuals must be financially prepared to live on a single-income budget often without diminishing the needs and aspirations of children.

Also, it’s important that divorcing partners remove each other as authorized users on credit accounts and immediately separate any joint accounts, thus ensuring that neither party is expected to pay the other’s debts without effectively lowering each other’s credit rating. When joint accounts cannot be closed due to outstanding debt, couples should probably consider coming to a separate written agreement as part of the divorce to specifically set out terms for repayment of the debt.

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