The end of a relationship can be the start of serious financial problems. Sharing finances may have felt right when you were a happy duo, but it can make for a complicated -- and costly -- breakup. Without taking the proper precautions, your past partner may ring up debt that you'll be responsible for and may even try to borrow money in your name. (See "Credit card revenge spending.") Here's how to make sure your credit is safe from a revenge-seeking ex.
*Protect personal credit cards. According to Jim Randel, author of "The Skinny on Credit Cards," it is illegal for anyone to use your individually held credit accounts without your permission -- whether it's your partner or your spouse. However, if the credit account was granted to you and you alone, it's up to you to make sure no one else has access to it. Always be in possession of the card, and if your ex can knows your online ID and passwords, change them immediately and make them un-guessable.
*Look into a legal separation. If you are married, an extra safety step may be in order. "If divorce is on your horizon, get immediate legal advice about a possible legal separation if allowed in your state," says Clint David, an attorney in Dallas. "Depending upon your state's laws, any debt that the other person charges to the account after that date might be theirs alone."
*Close co-signed and authorized user accounts. Shut down any authorized user or co-signed cards, says Randel. It is more important to protect yourself against wrongful debt than any ding you may get on your credit report for closing an account. In the event that there's a balance on a co-signed card, you will probably have to pay the debt off first. Tip: Transfer what you owe to another account that's in your name only and then close the original.
*Monitor your credit report. You are entitled to one free credit report per year from each of the credit bureaus, but you may get more at no cost if you suspect fraud. However, even if you have to pay for them, make a point of checking the reports if you feel the other person could compromise your credit. And contrary to popular belief, pulling your own credit report doesn't impact your credit score. Look for any debt you didn't incur, as well as loans and lines of credit you didn't pursue. After all, you can only dispute them if you know they exist.
*Add a fraud alert to your credit file. If you are really worried your ex will open new cards in your name and leave you with the bill, contact the credit bureaus and request a fraud alert. An alert will make it much harder for someone to fraudulently open an account because the credit issuer will have to call you and verify your identity before granting a line of credit or a loan.
*Speak with a lawyer. Sometimes it makes sense to pay for help and guidance. "Seek legal advice to see how best you can protect yourself," says David. Also, if the other person does use credit cards when they weren't supposed to, you may decide to take them to court. While you can take the matter to small claims court (where you represent yourself), the amount the other person charges may exceed the award limit for which you can sue. In all other courts, attorneys are strongly recommended.
*Talk with the other person. This may be the most obvious method of dealing with credit and relationship fears, but it's often overlooked. Discuss what you want to do with joined accounts and how you will each pay for combined debt. Still, "if the dissolution is hostile," warns Randel, "you might want to freeze or close the account first." Put all agreements in writing: You will pay this amount from that card, the other will pay that on the other. Turn over any cards that may be the other person's and ask that he or she do the same. Tying up loose ends now can result in far less money spent on legal fees later.
Don't ignore what can happen to your finances and credit during and after a love split. There's not much you can do to shield yourself from a broken heart, but there is a lot you can do to safeguard your credit.
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