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Tips for protecting credit scores in a divorce

Some North Carolina couples may suffer a drop in their credit ratings after they end their marriage. This can happen because of the strain of living on a single income or because joint debt is not paid off after the divorce.

Women may suffer larger blows to their credit rating than men. In part, this is because they have lower incomes than men on average. However, an Experian survey also found that half of divorced women reported that their credit was ruined by a former spouse. One of the main issues is that while a couple may agree to split a debt in their divorce agreement, creditors are not bound by this. If the debt is not paid, they will pursue the person the debt belongs to.

If possible, spouses should try to work together to close joint accounts and put assets in one name or the other. If one spouse takes the home, the mortgage might need to be refinanced. Former spouses should be removed on accounts where they are authorized users. People may also want to order copies of their credit reports. Monitoring these or freezing the ability to open new accounts may prevent a spouse from acting vindictively.

Some people may want to consult an attorney before taking steps to separate accounts or agreeing to do so. It may not be legal to close a joint account unilaterally. Some financial actions might make it appear as though a person is trying to conceal assets. Spouses may need to give their consent before being removed as beneficiaries on accounts, but agreeing to this removal before divorce could leave a spouse in a vulnerable position. For example, if the spouse is removed as beneficiary on a retirement account and the owner dies before the divorce is final, the spouse might receive nothing from it.

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