Credit After Divorce

Jan 08, 2015

TopTen Reviews recently published a DIY Guide to Credit Repair.  Chapter 3 specifically covers how to repair credit after a divorce.  Everyone knows that divorce often takes a financial toll, but most people do not consider the impact it has on their credit score.

The Guide provides three basic tips for ensuring your credit isn’t affected by your divorce.  The first tip is to sever all “joint credit commitments with your ex.”  This means that all shared accounts should be split and all debt paid off using assets.  This tip will be most important in the context of property division.  In New Jersey, the courts will equitably divide all marital assets.  See Pascale v. Pascale, 140 N.J. 583 (1995).  Parties, however, may divide their property as they see fit if they can reach a settlement agreement.  If parties reach a settlement agreement, it will take careful planning to ensure that one party doesn’t end up saddled with a debt that will ruin his or her credit score while the other party comes away from the agreement scot-free. 

The second post-divorce credit tip is to open individual checking and savings accounts that the other party does not have access to.  The Guide counsels that this will allow a party to pay off a debt without using joint finances to do so.  This could be helpful because when getting divorced there are often arguments between parties when one party accesses or uses marital funds or assets.  Marital funds and assets are all property that was acquired during the marriage that both parties have some rights to in the even of a divorce.  See N.J.S.A. 2A:34-23(h).

The Guide’s third tip is intended for any party planning to change their last name after the divorce or to retake their maiden.  The Guide advises that these individuals change their last name before applying for any new credit and ensure that all current creditors know of the name change.  In New Jersey, this can be done easily and at the same time that a party requests a divorce under N.J.S.A. 2A:34-21.  Name changes can also be requested after a divorce is finalized. 

While most people aren’t thinking about their credit when they get a divorce or proceed through settlement negotiations with a soon-to-be-ex, an experienced matrimonial attorney can take these issues into consideration.  If you need help with your divorce, call the attorneys at Sarno da Costa D’Aniello Maceri LLC at 973-274-5200 today.