Numerous issues must be resolved when a New Jersey spouse files for divorce. Every case is unique and key factors include how long a particular couple was married, whether they have children, own a business or have a high-net worth. It is important not to overlook important issues, such as knowing how to protect one’s credit during and after divorce proceedings.
Cancel Joint Accounts and Transfer Balances to New Cards
When preparing for a divorce, the sooner a concerned spouse establishes financial independence, the better. Regarding credit card accounts, it may be best to cancel all cards that are jointly owned. It is best to consult with your attorney as soon as possible to determine whether or not on which accounts to close. The balances can be transferred to new cards in one spouse’s name only. Especially in situations where there is contention, and one spouse might be taking revenge by going on a spending spree, this step prevents him or her from creating debt that the other spouse would be responsible to pay.
Not Cancelling Co-Owned Cards Can Have Disastrous Results
If spouses co-own a credit card and the spouse who has assumed responsibility for the debt after divorce does not pay it off, the other spouse is still legally responsible for it, as well. Unpaid debt can ultimately have a negative effect on one’s credit score. This is another reason why it is a good idea to establish separate ownership of all credit cards and bank accounts when planning to file for divorce.
Seek Clarification of All Credit Issues Ahead of Time
No one wants to be caught off-guard in court during property division proceedings. To avoid this, a spouse who is unsure about credit issues may want to ask an experienced New Jersey family law attorney to review his or her case. Such an attorney can recommend a best course of action for protecting credit and preventing other financial problems during and after a divorce.