If Your Long Island Divorce Attorney Does Not Ask You To Do This, Find a New Attorney!
As a divorce lawyer on Long Island, I ask every client to run their … credit report! If you’re going through a divorce and your divorce attorney has not asked you to do this, then … I mean it … run. Making sure that ALL marital debt is accounted for and satisfied as part of the divorce is your divorce attorney’s job. The resolution may be as simple as each spouse will be responsible for paying any debts that exist in their name, however, if this generic clause appears in your divorce agreement, and, there is a debt in your name that you forgot about, or, was the result or fraud, or even worse, your spouse taking out credit in your name of which you were not aware, make no mistake, you will be responsible for it.
There are a number of services that will provide your credit report. I direct all of my clients to www.annualcreditreport.com This site will provide you with a free credit report one-time per year, and, is authorized by the Federal Law. Once you have your credit report, read it. Make sure you understand it. If you don’t, ask your divorce attorney to review it with you. I ask every client to give me their report so I can ensure that all of their debts are accounted for and included on their statement of net worth.
The Statement of Net Worth is a form that each spouse is required to complete with their Long Island divorce attorney and is to be exchanged by the parties. It is an affidavit, meaning that each spouse swears to the accuracy of the information within the statement under the penalties of perjury. The form includes Family Data, Monthly Expenses, Income, Assets, Liabilities, Assets Transferred, Support, Legal Fees and Experts. Each spouse is required to provide at least three (3) years of tax returns, four (4) most recent paystubs and their retainer agreement with their attorney. The credit report is an integral part of completing the form properly.
Why is your credit so important? Most people understand that their credit score is important, but, they are not sure why it is. Here are a few important reasons:
1. A Bad Credit Score Limits Your Opportunities. If your credit score is lousy, no reputable lender will extend you credit. That means you won’t be able to apply for a mortgage, a car loan, a credit card, and, if you want to rent an apartment in a reputable development, you may be refused based on your credit.
2. Your Credit Score Determines Your Interest Rate. If you have bad credit, you may be offered a loan, but the interest rate will be higher than if you have good credit. That means you will pay back more to borrow that money than someone with good credit.
3. Insurance Premiums. Your credit score is used to determine insurance premiums. If you have bad credit, you will pay higher insurance premiums than someone with good credit.
4. Income Opportunities. Your credit score may come into play when applying for a job. If you will be handling your employer’s money, your employer may want to see your credit report as part of a background check. Bad credit could mean no job.
Resolution of the parties’ marital debt is part of the equitable distribution equation in New York divorces. It’s not only your Long Island divorce attorney’s job to make sure that you receive your fair share of the assets; it is his or her job to make sure that the marital debts are satisfied. You may have forgotten about that store credit card you took out to buy a new washer or dryer that is staying in the house your spouse is buying from you. Why would you wholly responsible for the washer and dryer your spouse is keeping?
Another reason it is important to run your credit report is that you may have joint credit cards with your spouse. advise all of my clients to cancel these cards immediately. A joint card means joint and several liability. That means, if your spouse incurs a debt on this type of account, you can be held 100 percent liable by the lender.
It is also important to run your credit to make sure that your spouse didn’t include you on any online credit applications. Sometimes it happens innocently, or not so innocently, but, you probably file joint tax returns with your spouse. That means your spouse has access to your Social Security number. Your spouse knows your birthday and your address, therefore, your spouse has all the information he or she needs to take out credit in your name online.
So, I conclude where I started. Resolving the outstanding debts of the marriage is an important part of your divorce attorney’s job, and, if your divorce attorney did not ask you to run your credit report, I implore you to consider switching divorce attorneys right away. Trust me, you will be glad you did.
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