Divorce can be a trying time on your credit as well as your finances and emotions.  A vindictive or spendthrift ex-spouse can incur debt on your joint accounts and destroy your credit rating during hte divorce process.  I fyou are not able to pay a joint account in full, inquire as to whether you can maintain a balance on the account after it is closed to prevent the situation from gettng worse. 

Tips for dealing with your credit during a divorce:

  • Get a copy of your credit report and familiarize yourself with everything in it.
  • Close all accounts that you do not need or use.
  • If you don’t already have one, apply for a credit card in your name while you can.
  • Close all joint accounts and credit cards as soon as possible.

Keep in mind that many of the courts in Texas have orders that prohibit accounts from being closed or limited while the divorce is pending.  So, either take these actions before the divorce is filed or you may need to seek court approval to do so. For example, see the Collin County Standing Order that applies to all pending divorces and my prior post on this topic: Collin County Texas Divorce Standing Order

Your credit report shoudl help you discover any outstanding debts that need to be addressed as part of the divorce process.  Consider using marital assets or funds to pay off joint debts so each spouse can start over with a clean slate.

Once the divorce is finalized, use credit cards sparingly.  To establish or maintain a good credit score, pay off balances on time every month. 

If you need to use credit for short-term liquidity, then you may be better off refinancing your home and avoiding balances on credit cards.  Benfits of home financing include deductibility of the mortgage interest and a lower interest rate.

 

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Photo of Michelle O'Neil Michelle O'Neil

Michelle May O’Neil has 30+ years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes…

Michelle May O’Neil has 30+ years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes genuine compassion for her client’s difficulties, yet she can be relentless when in pursuit of a client’s goals. One judge said of Ms. O’Neil, “She cannot be out-gunned, out-briefed, or out-lawyered!”

Family Law Specialist

Ms. O’Neil became a board-certified family law specialist by the Texas Board of Legal Specialization in 1997 and has maintained her certification since that time. While representing clients in litigation before the trial court is an important part of her practice, Ms. O’Neil also handles appellate matters in the trial court, courts of appeals and Texas Supreme Court. Lawyers frequently consult with Ms. O’Neil on their litigation cases about specialized legal issues requiring particularized attention both at the trial court and appellate levels. This gives her a unique perspective and depth of perception that benefits both her litigation and appellate clients.

Top Lawyers in Texas and America

Ms. O’Neil has been named to the list of Texas SuperLawyers for many years, a peer-voted honor given to only about 5% of the lawyers in the state of Texas. Ms. O’Neil received the special honor of being named by Texas SuperLawyers as one of the Top 50 Women Lawyers in Texas, Top 100 Lawyers in Texas, and Top 100 Lawyers in DFW for multiple years. She was named one of the Best Lawyers in America and received an “A-V” peer review rating by Martindale-Hubbell Legal Directories for the highest quality legal ability and ethical standards.

Author and Speaker

A noted author, Ms. O’Neil released her second book Basics of Texas Divorce Law in November 2010, with a second edition released in 2013, and a third edition expected in 2015.  Her first book, All About Texas Law and Kids, was published in September 2009 by Texas Lawyer Press. In 2012, Ms. O’Neil co-authored the booklets What You Need To Know About Common Law Marriage In Texas and Social Study Evaluations.  The State Bar of Texas and other providers of continuing education for attorneys frequently enlist Ms. O’Neil to provide instruction to attorneys on topics of her expertise in the family law arena.