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PROPOSED LAW HELPS STAY-AT-HOME SPOUSES ESTABLISH CREDIT

Liz Weston, the famous advice columnist, offered some interesting advice recently in the LA Times to a divorcing reader. She suggested that the reader close all joint credit card accounts to prevent her spouse from trashing their credit once the divorce is final. However, there is one important thing Ms. Weston didn't mention. If you do plan to get divorced, make sure you open a credit card or two under your own name using the joint credit you've built up during the marriage. You should then keep those cards active for several months before you file for divorce by making a few charges and paying off the full balance each month. 

New rules were proposed recently by the Consumer Financial Protection Bureau that allow for stay-at-home spouses to open individual credit card accounts secured by the joint income and credit they have with their spouse. You would be entitled to claim third party income that you can reasonably expect to have access to on your individual credit card application. This allows you to build a credit history of your own.

This individual credit history can prove vital once you have separated from your spouse - stay-at-home divorced spouses generally have no independent credit score with which to apply for credit card, lines of credit, mortgages or other loans.

Regardless of whether you expect or need this kind of arrangement to build credit prior to a divorce, it is important that you work with an experienced divorce attorney to plan your divorce. Together you strategize the best time to get divorced and make sure that your rights are protected throughout.

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