The Law Office of Matthew M. Williams, P.C.

630-409-8184

1444 North Farnsworth Avenue, Suite 307, Aurora, IL 60505

Yorkville Office By Appointment

Initial Consultations via ZOOM Available

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DuPage County divorce lawyer for financial issuesDivorces are difficult for some families, especially when it concerns financial matters. Splitting your marital finances during your divorce can be challenging, but it can also be disastrous for a couple. With two separate households comes increased financial obligations. Some people may be prepared for the increase, while others may struggle. While divorce in itself will not lower your credit score directly, certain actions and events that take place during the divorce can affect the score in negative ways. The following are a few situations that could potentially impact your credit score when going through a divorce:

You Have to Refinance Your Home

One of the biggest assets you may have to deal with in your divorce is the family home. If one spouse is planning on keeping the marital home, it is best to make sure the home is in that person’s name only. To do this, you may have to refinance your mortgage. Refinancing means you will have to go through a comprehensive credit inquiry, which can affect your credit score.

Your Spouse Still Has Access to Your Accounts

When you are married, most of your financial accounts are probably joint accounts, meaning you and your spouse both have ownership over them. When you get divorced, the process of splitting those accounts and/or taking your spouse’s name off of them can take a while. If your spouse still has access to accounts such as your credit card account, he or she can rack up charges, which can affect your credit score in a negative way.

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credit score, divorce, divorce finances, Illinois divorce lawyer, Chicago divorce attorneyFinances related to divorce can be challenging to figure out. Maintaining mutual financial accounts or ignoring your new obligations (like child support or alimony) can be difficult for a recently divorced individual. If you don’t take steps to establish yourself as financially independent, you might find it harder to do things such as take out loans in your name or open new accounts.

There are steps that you can take to protect your credit score and get on top of your finances, even after a divorce. Your first step is to get your credit report when you begin the divorce process. Bear in mind that having a divorce decree doesn’t free you up from any joint account debt accumulated during the marriage - and that includes car loans or mortgages. In the case where a judge orders that the other party is responsible for a particular bill, you still should follow up on the payments because it will affect your credit score.

According to Experian, you should also know that a bank or credit card issuer has the right to report negative data to credit reporting agencies if a spouse makes a late payment on one of those joint accounts. If your former spouse decides not to pay, it will affect both your credit score, and your former spouse's, unless you choose to pay. That’s why it’s so important to close joint accounts as soon as possible in a divorce. Creditors can help you navigate the process of transferring joint accounts into the sole responsibility of one party.

Finally, don’t stop paying any bills. You do not want legal action taken against you in the short term. Keep copies of all canceled checks or other proof of payment. Consult with your attorney to be sure that the court is aware of all joint accounts, too. Do not let a divorce destroy your credit by staying on top of payments. Contact an Illinois divorce attorney today for a personal evaluation.
The Law Office of Matthew M. Williams, P.C.

630-409-8184

1444 North Farnsworth Avenue, Suite 307, Aurora, IL 60505

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