California is a community property state, meaning debts incurred by either spouse during the marriage belong to both spouses equally. All community debt and liabilities, including credit cards, mortgages, and student loans, are a necessary part of your divorce settlement. Many people find their credit in shambles due to the lingering effects of a divorce. Since your financial future depends in large part on a good credit standing, assigning community debts at the time of divorce is very important to protecting your credit. Below you will find several tips for handling your finances and protecting your assets during the divorce process.
Joint Accounts
The divorce process can sometimes last for months, or even years. Many people overlook payment of bills during a divorce. Logically, things like utility bills should be put in the name of the spouse that will be keeping the marital home. If a spouse moves out of the marital home, but continues to pay the mortgage, he or she may also be entitled to a reimbursement for those payments.
However, it is important to make sure that all joint bank accounts get paid on a regular basis during a divorce. Even if your spouse is assuming a debt, such as a joint credit card bill, your credit will still suffer if the amount is not paid on time each month. Any joint credit accounts that do not have a balance due should be closed. If a joint credit account does have an outstanding balance, the account should be frozen so that no additional charges can be made. Even though you will still be responsible for the balance owed, no further debt can be added to the account. To make sure all your assets are protected and all credit considerations are accounted for, it is best to employee the help of an experienced and successful divorce lawyer in San Diego, CA.
Establishing Your Own Credit
After years of marriage, it is common for individuals to have no credit established in their own name. You should request a copy of your credit report before the divorce process begins. A credit report will show you all debts that are outstanding, including community debts that you are liable for. Since it is often easier to get credit during divorce rather than after a divorce is finalized, you should consider applying for your own credit card before the divorce is finalized. Using the card each month and consistently paying the balance on time is an important step to building or rebuilding your credit.
Issues such as determining the character of debt and whether a spouse is entitled to reimbursement are not often straight forward, so it’s a good idea to consult with an experienced San Diego family law attorney at Boyd Law for advice. Call us today at 310-777-0231 for a free consultation.
