Illinois couples who are getting a divorce may need to establish individual accounts and credit for themselves. This will help protect a person from a spouse’s spending and allow that person to begin building up an individual credit rating. If a spouse is on an account as an authorized user, that spouse should also be removed.
Debts that belong to the couple may be split in the divorce, so people should not pay more than their share. Otherwise, they might not benefit from the advantage of only needing to pay half the debt. However, if a person’s spouse is not paying bills and it is going to affect the person’s credit, that person may need to pay in order to preserve good credit.
People should also work on establishing their own credit. Credit should be used responsibly. For example, people should pay off credit cards each month. People should also monitor their credit accounts after the divorce to ensure that an ex-spouse’s financial activity does not appear there. People should also track their spending and avoid overspending even if they are under stress after the divorce.
Splitting up some accounts could be complex. For example, people should be aware that there could be strict rules that must be followed in splitting a pension account. Dividing a 401(k) may require a document called a qualified domestic relations order to avoid taxes and penalties. Some people may decide it is easier for one person to keep the retirement account and the other person to take another asset. However, it is important in this case to make sure that assets are actually of roughly equal value. For example, if one person takes the house, that person might want to make certain they account for the cost of upkeep, taxes and insurance.