Protecting Your Credit in Divorce
Working through a divorce is one of the most emotionally challenging situations many people will ever experience. During this time, it is important to be aware of the potential negative impact that emotions can have your finances. While you, your spouse, and your legal representatives endeavor to reach an equitable agreement on the distribution of assets and liabilities acquired during the marriage, it is critical for you to be proactive about safeguarding your personal financial well-being.
Your Credit Score Is Your Report Card
We advise our clients who are involved in the divorce process that managing their finances must be a top priority. Safeguarding your credit is necessary so that you may have access to or qualify for:
- A mortgage or residential lease;
- Low interest rates on secured and unsecured debt; and
- Employment opportunities that require credit checks.
Prioritize Paying Bills and Consult With Legal Counsel
It is not uncommon for those who are in the midst of a divorce to have financial challenges that make it difficult to meet their current obligations. To maintain a high credit score, however, paying bills on time is a necessity. Your divorce attorney can be a tremendous resource regarding which bills are the most important to maintaining a high credit score, what options may be available for filing for emergency financial support—known in Illinois as temporary maintenance—and how to negotiate with utility providers and other creditors.
As a general rule, these types of bills should always be paid promptly:
- Mortgage or lease payments for both the marital home and your current residence (if they are different);
- Credit card and installment loans such as those for a vehicle; and
- Electric, gas, and other utilities.
Start Building Your Personal Financial Identity
In addition to paying bills on time, a person in the process of divorce must begin to forge a new financial identity on his or her own and not as part of the married couple. As you begin moving forward, you may want to consider:
- Opening new lines of credit and bank accounts as a single account holder;
- Closing all joint accounts; and
- Reviewing the free, annual credit reports available from the three major reporting agencies.
Under the best of circumstances, divorce can be emotionally and financially exhausting. If you are considering a separation, divorce, child custody matter or any other family-related issue, an experienced Kane County family law attorney can help. Call 630-232-9700 for a confidential consultation at The Law Offices of Douglas B. Warlick & Associates today.
Sources:
http://www.bankrate.com/finance/debt/5-steps-protect-credit-divorce-1.aspx
http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2086&ChapterID=0
