Is Protecting Your Credit During Divorce an Issue?

How to Protect Your Credit

Protecting your credit during divorce isn’t an issue for everyone. But it is something you should consider. And, you can certainly take precautions that prevent it from becoming an issue. During divorce, you can’t start too soon when it comes to safeguarding and planning your financial future.

Withdrawing Money from Bank Accounts

If you have a joint bank account with your spouse, before you file for divorce, you can legally withdraw half of what is in the account. On the other hand, it is illegal to withdraw half of the funds duringthe divorce.

Be aware of the fact that withdrawing money without letting your spouse know could create greater hostility about the divorce.

The best approach is to work together with your spouse whenever possible. Although, if you believe the divorce will be hostile, your spouse may attempt to withdraw all the funds. Or, your spouse may put a freeze on the account.

Filing a restraining order or mutual property injunction is the legal action that would freeze an account. In doing so, neither of you would be able to withdraw funds.

It is always wise to consult with your attorney about the best approach before taking action.

Set Up a Personal Bank Account

If you decide to withdraw your half, you would set up a personal account and then transfer the funds to your new account. It’s wise to document what you spend the money on in case it becomes point of contention during your divorce. Another safeguard would be to put the money into a savings account. In case your actions are questioned, you would still have the money.

Protecting Credit During Divorce by Closing Joint Credit Card Accounts

Any joint credit card accounts that run up debt will be subject to property division during divorce. If you can close your joint accounts and keep debt separate after that point, it would be to your advantage.

Are You Considering Divorce?

A smooth transition for divorce usually requires legal strategy and planning. Attorney Thomas Little can answer your questions about protecting credit during divorce. He can also answer any other questions and help you start making the right decisions.