Protecting Your Credit When Spouse is Guilty of Financial Infidelity

 Posted on October 16, 2014 in Divorce

A report issued last year by Moneysupermarket.com found that one in ten divorces was caused by financial infidelity. The survey included 1,000 men and women who admitted that they kept credit card purchases and statements hidden from their spouses.

Half of those surveyed said it was not luxury or frivolous purchase they hid from their spouse. The majority of hidden purchases were actually the payment for living expenses, such as food, rent and utility bills.

When couples do break up over financial infidelity, there is often the issue of low credit scores and bad credit history that ends up affecting both spouses' credit, not just the one making all the hidden purchases. The "injured" spouse usually does not realize what has happened until they try to obtain a car loan or credit card and find they are required to pay a higher interest rate, or are turned down completely. In many cases, it can take up to seven years for the injured spouse to repair their credit.

Financial advisers recommend that a person who has an ex-spouse who was guilty of financial infidelity take the following steps to help protect and repair their own credit:

• Make sure that all joint credit cards are closed. Contact the financial institution directly. Do not rely on your soon-to-be ex-spouse to do it. You should also apply for a credit card in your name only;

• Depending on how the divorce property settlement ends up, have your name or your spouse's name removed from the mortgage. This is not always possible, especially if your spouse gets the home and has bad credit. The financial institution holding the mortgage may not remove your name. If your spouse does get the home, discuss with your divorce attorney about having a stipulation in the divorce settlement that if they are unable to get a mortgage in his or her name alone, then the property will need to be sold; and

• If there are joint loans or debts that you cannot have your name removed from, even if your spouse is deemed responsible for them in the divorce settlement, be aware that if he or she fails to make the payment, you will still be liable for them. Ensure that the loan holders have your contact information so you will be notified of any missed payments.

If you have discovered your spouse has been guilty of financial infidelity and have decided to file for divorce, contact an experienced Wheaton divorce attorney to help protect your rights during divorce proceedings.