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Separating accounts and credit during divorce

On Behalf of | Dec 5, 2017 | Family Law

For Maryland couples who are going through a divorce, one important step might be to close any joint accounts and open new individual ones. If spouses have accounts on which the other person is named as an authorized user, the user should be removed. These actions protect people from the other party being able to take all of the money from an account or for running up charges for which both are later responsible. It also gives people the opportunity to start to establish their own credit histories.

Shared debts are usually split during a divorce, so people should not pay more than they owe. The exception is if a spouse is not going to pay the bill and it is going to hurt the other person’s credit. In that case, the person may need to make the payment.

People who begin building a credit history for themselves should be responsible. For example, they should pay off their accounts regularly and avoid falling into debt. It might be necessary to make a budget and track spending. Furthermore, people should keep an eye on their credit reports for errors. They should also make sure an ex-spouse’s activity is not on the report.

Another aspect of divorce is dividing property. People should make sure they protect their financial interests at this stage. The process can be an emotional one, and some people might be tempted to concede more than they should in order to get it over with. A person might want to work with an attorney to discuss how to make good financial choices during property negotiations. For example, if a person is taking one marital asset while the spouse another of roughly equal value, the person should make sure that taxes on the asset and any other reduction in its value are considered.

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