There are many ways your ex can make your life hell during a
divorce, but there's one you might not have expected: wrecking your
While simply getting a divorce can negatively affect your credit
score due to closing of joint accounts and credit inquiries from
applying for new credit, your ex can take actions - intentional or
not - that can cause even bigger problems, says Jeffrey Sklar,
managing partner of Sklar, Heyman, Hirshfield & Kantor, a New
York CPA firm. Sklar is also licensed in financial forensics and
has been hired to comb through the finances in many messy divorce
From vacations with lovers on a shared card with a spouse to
clandestine accounts to spending sprees designed to get back at
exes, Sklar says he has seen it all.
Just how do you head off credit disaster during your divorce?
Here are five ways your soon-to-be ex can harm your credit, and how
to minimize the damage:
1. Revenge spending.
"It happens a lot when one spouse has been in a relationship
outside the marriage and someone's mad," Sklar says of spending to
get back at a spouse. For example, after former Oasis lead singer
Liam Gallagher called his wife to confess he'd fathered a "love
child," she went on a "
" spree, Gallagher claimed in court, according to media reports. A
judge disagreed, saying she was simply spending like the wife of a
rock star. And it's not just celebs: one divorcing wife found out
her husband had leased a Bentley to drive another woman around
town, so she went out and "spent a boatload on jewelry," Sklar
says. Men do it, too. A husband went on an $8,000 strip club
spending spree two days after he and his wife split, Sklar says.
"Now that's on the credit card, and it's maxed out," Sklar
What to do:
If your ex charges up debt on a joint card or one on which you're
the primary cardholder and they're an
, it can have a big impact on your credit score. It also puts you
on the hook for the bill. If your ex is listed as an authorized
user on one or more of your credit cards, contact your card issuer
right away to have them removed, says Stephen Lesavich, co-author
of "The Plastic Effect: How Urban Legends Influence the Use and
Misuse of Credit Cards." That would head off any revenge spending
on your cards, he says. If you share jointly held cards, pay them
off and close them if you suspect potential foul play.
2. Secretly closing accounts.
"When a card gets closed, your credit can take a big hit," Lesavich
says. When he was getting divorced, his wife closed all joint cards
without telling him, he says. He didn't have any cards in just his
name, and a judge ordered the couple not to apply for new cards
during the divorce. His credit score dropped by triple digits, and
he lived for a year with no plastic to use in a pinch. "It made me
really nervous," he says.
What to do:
Open one or more cards in your own name before the divorce so you
don't get stranded without a card, Lesavich says. Adding new
available credit will prevent your score from taking as big of a
hit when you close joint accounts, which will reduce your total
available credit and length of credit history, both of which impact
your credit score. If possible, calmly decide together when to
close joint cards, he says.
3. Not paying off joint accounts.
Exes sometimes have trouble making ends meet after a split.
"Couples living apart need more money than couples living
together," Sklar says. A divorce settlement may divvy up debts,
ordering the husband to pay one joint debt and the wife another,
but creditors don't care what it says, says Ed Boltz, president of
the National Association of Consumer Bankruptcy Attorneys.
If you have joint debts, such as one where you or your spouse
co-signed, you're each 100 percent responsible. "If you have a
joint credit card with a $5,000 balance, Chase isn't going to come
after you for $2,500 and your spouse for the other $2,500," he
says. If your ex files for Chapter 7 bankruptcy, the kind in which
many debts can be wiped out, and a joint debt gets discharged in
the bankruptcy, the creditor can come after you, Boltz says. Also,
late payments and other negative marks on the account can ding your
credit. "Your ex can really continue to drag you down," he
What to do:
Make sure you continue to receive statements and keep online access
for any joint account your ex is supposed to be paying off, Boltz
says. That way, you can find out if a payment is late before a
blemish shows up on your credit report. If your ex is late on a
bill, you can pay before your credit gets damaged. "You have the
choice: pay it yourself or take the hit," he says. If you find out
your ex is filing bankruptcy, contact your divorce attorney right
away to decide what to do. "There may be a fairly short timeframe
to file objections," he says.
4. Failing to get a new home loan.
"Another big issue is the mortgage," says Brette Sember, author of
"The Complete Credit Repair Kit" and "The Complete Divorce Guide."
If you're the one who has to pack up and leave the marital home,
but your name is on the mortgage, a judge may order your ex to
refinance the house to remove your name from the loan. If your
former spouse fails to refinance and doesn't stay current on the
payments, that will affect you. "Your credit rating can be ruined
when this happens," Sember says. Even if your ex makes payments on
time, it still will be hard for you to get a new mortgage with your
name on the old one, Sember says.
What to do:
Know that it's common for one spouse to be unable to refinance a
mortgage on his own, often because his solo income is too low,
Sklar says. Work with your divorce attorney to address this in your
divorce agreement, he says. For example, you might decide that if a
refinance doesn't happen in a certain timeframe, it triggers a sale
of the house. Or, you could say that if the spouse in the house
fails to make a payment, the other can make it and subtract that
from other bills owed. "A refinance is ideal, but it doesn't always
work," he says.
5. Stealing your identity.
"Exes are a huge source of ID theft," says Leasha West, a Michigan
wealth strategist who has worked with divorcing clients. "They know
all your info: your address, your mom's maiden name and your Social
Security number," she says. The ID Theft Resource Center, a
nonprofit that helps victims of ID theft, offers a
on how to deal with identity theft by a spouse or ex-spouse. Never
assume your ex wouldn't use your information to open a new account.
"They're your ex for a reason," she says.
What to do:
Sign up for a credit monitoring service and check your credit
reports regularly for any inquiries you don't recognize, West says.
Also consider putting a
freeze on your credit
with all three credit bureaus, says Katie Gampietro Burke,
certified financial planner in Florida. Costs vary by state, but
it's about $10 for each bureau (Equifax, Experian and TransUnion)
or $30 total. That means no one can get new credit in your name,
including you, until you lift the freeze, Burke says. "That's one
way I like to protect clients," she says.
The good news: You should be able to see the beacon of good
credit at the end of a divorce, Lesavich says. Once you've parted
ways with an ex who may have wrecked your score, you can rebuild
your credit, along with your life. In fact, it took only a little
over a year for his score to rebound after his divorce.
"Once you're out there doing the stuff you're supposed to do,
your score goes back up pretty quickly," he says.
Don't ignore divorce decree mandate
Dividing credit card rewards in a divorce
"Debit cards can be obtained at a very young age," explained
Stephen Lesavich, lawyer and author of "The Plastic Effect: How
Urban Legends Influence the Use and Misuse of Credit Cards." "For
example, my 17-year-old son has a parent-supervised, high-school
checking account at my bank and a debit card was issued for this
high-school checking account, which he tied to a mobile pay
system on his mobile phone." Credit cards generally cannot be
obtained until you are 21, unless there is a co-signer or a child
is added as an authorized user to a parent's card account.