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“Don’t let your mouth write no check that your tail can’t cash.” — Bo Diddley
If you are separated, it is a good idea to get a copy of your credit report as soon as possible. The very best way of getting out of trouble is not to get into it in the first place, and accurate information about your credit status can be critical to protecting yourself. You can’t manage what you can’t see!
Once a final separation has occurred, I usually recommend taking a hard look at your debt. Shutting down joint credit lines and removing a spouse as an authorized user on your own separate credit accounts is usually a smart move. What could happen? Read on.
A race to the bank.
I once spoke with a new client who owned a house jointly with his wife. While reviewing his debts with him, he told me that he had a home equity line of credit with a zero balance that was intended for emergencies. I urged him to shut it down immediately, and as soon as our meeting was done he hastened to the nearest branch of his bank to do just that. That very day, before the records were properly updated, his wife went to a different branch of the same bank and maxed out the credit line! Although in this instance we were able to resolve the issue successfully and without need for litigation, I have this to say about depending on luck: don’t do it.
A license to bill.
Another client of mine had his wife listed as an authorized user on one of his credit cards, for which the bill was still delivered to his wife at the former marital residence. His wife, resentful toward my client, decided to live off the credit card for as long as she could while ignoring the bills. It was more than two months before my client discovered that he was five figures in debt! Since the court decided to defer handling the matter until it was time to distribute the rest of the marital estate (more than a year later!), my client had no choice but to take responsibility for the debt in the short term to preserve his credit rating. A little bit of prompt legwork and a telephone call could have prevented the whole problem.
When you look at your credit report, you may discover a credit account in your own name that you don’t remember applying for, or ever using. Worse, you may discover that the mystery account has a balance. Worse still, you might discover that the balance is delinquent! More than one client of mine has learned to his dismay that his or her spouse fraudulently took out a card in the client’s name, ran up a balance, and then walked away from it. Whether your spouse fraudulently created your mystery account or whether you simply forgot that it existed, the first line of defense is the same: shut down active accounts in your name that you neither recognize nor need. To be able to do this, your credit report is essential.
Never forget that the law is always better at cleaning up a mess, than it is at preventing the mess in the first place. Take prevention into your own hands and you will not only be far better off, you can save yourself thousands of dollars in legal fees. Adopt my motto: work for sunshine, but prepare for rain.
Get a copy of your credit report.
Once each year, you have the right to a free copy of your credit report from each of the ‘big three’ credit reporting agencies: Experian, TransUnion, and Equifax. Getting these reports is both quick and easy: go to AnnualCreditReport.com. The Federal Trade Commission indicates in a consumer alert bulletin that this site is the only official website for this purpose. Since you have to provide your Social Security Number to get your report, keep that in mind to protect yourself from identity theft! While no one can personally guarantee a website that someone else has produced, I can assure you that I have personally used this site, and that I was able to get all three of my credit reports.
Are you worried that your spouse might try to open a credit account in your name now, or sometime very soon? Learn how to put a fraud alert on your credit report.
If you need legal assistance with your divorce or family law matter in Southwestern Pennsylvania, call me to set up a personal consultation. This blog will feature periodic updates. Consider subscribing! Please do not comment anonymously, and do not post anything that you consider confidential. I try to be responsive to commentary and questions, but know that posting here will not create an attorney/client relationship and that I will not offer legal advice via the Internet.
Michael B. Greenstein
Greenstein Family Law Services, P.C.
1789 S. Braddock Avenue, Suite 590
Pittsburgh, PA 15218