Divorce brings emotional and financial challenges, and protecting your credit is a critical part of securing your future. While divorce itself doesn’t appear on your credit report, the financial shifts it triggers can impact your score if not managed carefully. At Frangos Legal, LLC, our experienced family law attorney, Cindy Kenworthy, with over 35 years of practice, guides clients across Indiana to safeguard their financial health during divorce. Here are key steps to protect your credit, ensuring a stable foundation as you move forward.
Understanding Divorce’s Impact on Credit
Divorce doesn’t directly affect your credit score, but shared financial responsibilities can. Joint accounts, like credit cards or loans, tie both spouses’ credit to the same obligations. In Indiana, divorce settlements often divide these responsibilities (Ind. Code § 31-15-7-5), but lenders still hold both account holders liable. If your ex misses a payment, your credit could suffer. Opening new accounts or closing joint ones may also influence your score. Cindy Kenworthy helps clients statewide navigate these issues, ensuring divorce agreements protect your financial interests.
Close or Restructure Joint Credit Cards
Joint credit card accounts can pose risks post-divorce. To avoid unexpected charges, pay off and close these accounts whenever possible. If balances remain, ask your lender to transfer them to individual accounts or convert the joint account to one in your name. Redeem any rewards before closing. Frangos Legal, serving clients across Indiana, can help you address joint debts in your divorce settlement, aligning with Indiana’s equitable property division laws (Ind. Code § 31-15-7-5) to minimize credit risks.
Manage Your Mortgage Obligations
If you and your ex share a mortgage, you’ll need a plan. Refinancing the loan in one spouse’s name removes the other from liability, but if that’s not feasible, selling the property may be the best option. Remaining on a mortgage while your ex retains the home leaves you vulnerable to missed payments impacting your credit. Cindy Kenworthy’s expertise ensures your divorce agreement clarifies property responsibilities, protecting your financial stability throughout Indiana.
Address Cosigned Loans
Cosigned loans, such as car or personal loans, keep you financially accountable, even if your ex agrees to make payments in the divorce settlement. Lenders rarely release a cosigner, so your ex may need to refinance the loan independently. If they default, your credit is at risk. Frangos Legal helps clients statewide structure divorce agreements that address cosigned debts, tying them to support or property obligations (Ind. Code § 31-16-6-1) to reduce financial exposure.
Monitor Your Credit Closely
Vigilance is key during divorce. Regularly check your credit report to confirm joint accounts are closed, payments are current, and no errors appear. Free credit monitoring services from major bureaus make this easy. Spotting issues early prevents long-term damage. Our team at Frangos Legal supports clients across Indiana by reviewing financial aspects of divorce settlements, ensuring your credit remains protected as you transition to a new chapter.
Build a Strong Financial Future
Divorce is tough, but proactive financial planning can ease the journey. By closing joint accounts, addressing mortgages and loans, and monitoring your credit, you set the stage for stability. At Frangos Legal, LLC, located at 244 N. College Ave., Indianapolis, IN 46202, Cindy Kenworthy offers expert guidance to clients throughout Indiana, helping you navigate divorce with confidence. Contact us today at [email protected] or 317-643-1345 to schedule a consultation and protect your financial future.