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Separating credit during a divorce

On Behalf of | Dec 1, 2017 | Uncategorized

In many situations, separating one’s credit from a spouse during a California divorce can be complicated. However, it is important to take the steps necessary to separate one’s finances so that it will be easier to begin establishing a favorable credit record in one’s own name.

Any financial accounts that are in both spouses’ names should be paid off and closed immediately. This will help both parties from getting further into debt. If neither party is able to afford to reconcile the shared debts, the duty for doing so can be divided and specified in a provision of the divorce settlement.

Sometimes, people who are authorized users on a credit card may begin to accumulate significant charges because they are not obligated to pay the debt. In order avoid this, spouses should be sure to remove such user authorizations from their credit cards as soon as possible.

Another helpful financial tip is that spouses should refrain from paying more than their share of any shared debts. One spouse may be required in the divorce decree to pay the majority of the debt, which the other spouse may not be able to take advantage of if the debt is paid before the divorce has been finalized. Any jointly held accounts should be frozen if neither party is able to pay off the accounts quickly. This can prevent additional debt from being added, for which both parties would be responsible.

An attorney who practices family law may protect the interests of clients who are facing the end of a marriage. The attorney may take steps to ensure that any hidden financial assets, such as funds in offshore accounts, are part of the overall settlement.