Tag Archives: joint finances

How Divorce Can Impact Your Credit

DuPage County divorce lawyer credit scoreDivorce can cause a great deal of financial upheaval for a family. However, the divorce itself does not have a direct impact on your credit score. The divorce decree does not add or remove points from your existing number, but the financial outcome after the divorce can still play a significant role in what happens to your score. Here is what can go wrong and how to prevent damage to your score:

Responsibility for Joint Debts

Creditors want their money. They do not care if you got a divorce, nor do they care whether a judge proclaimed that one spouse is responsible for the balance on the joint credit card. If your name is on the account as a co-signer, an authorized user, or a joint account holder, you are also financially liable for these debts. The divorce decision does not negate the existing agreement you have with the lender.

Your Credit Score Is on the Line

If you share an account in any way with your ex, old or new, you are also legally responsible for the balance on that account. If the judge gives the responsibility to your ex, and he or she fails to make a payment, the negative marker will end up on your credit score, no matter how far in the past your divorce occurred. Your credit score may also be affected if your ex or someone else with access to a credit card runs up the balance on the account. Negative consequences affect all credit scores associated with an account, yours included.

Preventative Measures

A general rule of thumb is to close any joint accounts before the divorce process begins. Unfortunately, in some situations, a vindictive spouse may sabotage their former partner’s credit score by making large purchases with no intention of paying the balance. Closing accounts or removing a spouse from an account can help avoid this situation.

Other preventative measures you can take include maintaining an amicable relationship with your spouse throughout the divorce and working together with your ex to pay down credit card balances and ultimately close the accounts entirely. You may be able to work with lenders to pay the amount in full or settle for a lower total. You can also communicate with lenders to convert a joint account into an individual account. No matter your decision, it is best to clear up any loose ends as soon as possible, so you can begin rebuilding your credit once your divorce is finalized.

A DuPage County Family Law Attorney Can Help

If you are considering divorce and are worried about how the process will impact your credit score, the Wheaton divorce lawyers at Andrew Cores Family Law Group can answer your questions and address your concerns. Our experienced attorneys will walk you through the divorce process and advise you of how to protect your finances and your credit. Call us today at 630-871-1002 to schedule your free initial consultation.

Sources:

https://www.experian.com/blogs/ask-experian/how-divorce-can-impact-your-credit-scores/

https://creditcards.usnews.com/articles/ways-divorce-affects-your-credit

A New Kind of Infidelity

DuPage County divorce lawyer, financial infidelity, hidden assets, infidelity, joint finances, lawsuits for infidelity, Wheaton divorce attorneyPeople commonly treat their finances as a personal, private matter, and not something to be discussed with others. However, that changes once they enter a marriage. Couples join their lives together during a marriage, and that includes joining their finances. They have to share bank accounts, take on debt together, and make purchases for the marriage as a unit. Not every couple does so successfully though. Instead, some spouses end up being financially unfaithful.

A recent survey by the National Endowment for Financial Education discovered that one out of every three adults who have been in a relationship with combined finances admits to lying about money. Some people even lied about such basic topics as the amount of debt they owe or the amount of income they earn. Seventy-six percent of people who responded to the survey also said that when dishonesty about money occurred, it had an effect on the relationship. It even ended in divorce in 16 percent of cases.

Warning Signs 

There are many different warning signs that a spouse may be committing financial infidelity. These include:

  • Becoming reserved or defensive when issues of money or spending come up;
  • Hiding cash or bank accounts from the other spouse;
  • Making large purchases on a whim or without consulting the other spouse;
  • Refusing to share financial information like bank statements or online banking logins;
  • Opening new credit cards in only their name; and
  • Hiding purchases, especially large ones, from the other spouse.

Responding to Financial Infidelity

Once a spouse discovers financial infidelity, they must make their own decision about how to handle it. Some couples choose divorce, while others attempt to go through the long, difficult process of working through the trust issues associated with financial infidelity.

If spouses do want to work through the issue of financial infidelity, then communication and transparency are key to solving the problem. At its core, financial infidelity is an issue of trust. The spouse who was lied to is going to need to learn to trust the other spouse again, and that takes time and understanding. Additionally, the communication is important to help spouses work through whatever issues caused the financial infidelity in the first place. Often, such dishonesty results from the two spouses’ having different money management styles; one spouse may prefer to save their money for a rainy day, while the other may prefer to spend it when they can. This is a common problem in many marriages, and simply requires compromise and openness to work through.

If your spouse has been financially unfaithful and you would like to file for a divorce, reach out to a skilled DuPage County divorce lawyer today. Our experienced team of attorneys will help defend your rights in and out of the courtroom.