We call spousal identity theft when your partner may open an account on your name for example. Financial infidelity can have serious effects on both your credit score and your relationship. Fortunately, you can recover from this major breach of trust.
If your spouse opens an account in your name without your permission, they are committing fraud. Spousal identity theft is very much illegal; however, you should handle the situation with your desired outcome in mind. If you hope to repair your relationship, you might not want to take legal action against your spouse.
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Regardless of how you decide to proceed, it’s critical that you consult with an attorney to decide on the appropriate course of action. Your legal rights regarding debt during a divorce may vary based on the state you live in.
But First, Address the Fraud
Before you consider your relationship, you should pull your credit report to ensure there are no other unexpected accounts. You should also request a freeze on your credit report with the three credit bureaus. This will inform your lenders that until you say otherwise, no new accounts can be opened in your name. You also have the option to make a note and address your spouse on the freeze.
While the freeze may cost a small fee, and it is not entirely foolproof, it can be very effective. And as the victim of identity theft, it’s important that you take every measure to protect yourself moving forward.
Pay Off the Debt as Soon as Possible
Even if it’s fraudulent, you should pay off the debt incurred from the betrayal as soon as possible — otherwise it will gain interest and continue to grow. In fact, in some states you may be held responsible for your spouse’s identity theft as a result of community debt practices.
Moreover, if you make a claim, you will likely need to wait months for any sort of resolution. Your account will gain interest and hurt your credit during this time, so paying off your debt is the most effective way to recover.
The Credit Pros will help improve your credit score by removing inaccurate credit information from your consumer credit reports.
Check your free credit report and FICO credit score, understand, manage, and improve your credit and protect your personal information.
You’re more than just your credit score. With Grain, it’s possible to access a revolving line of credit based solely on your cash flow.
Decide Whether You Want to Stay in the Relationship
If you want the debt written off due to fraud, you will need to press charges against your spouse. The credit card company will then go after your spouse to pay off the debt. In addition, you should take the steps to protect your income and assets from identity theft in the future, and close any joint accounts.
During the divorce proceedings, make sure the attorney addresses the spousal identity fraud in court. This will make sure you are covered, and help you work around any community debt practices.
Conversely, if you want to stay in the marriage, a counselor can help you navigate the breach of trust. Do make sure to end the relationship if your spouse continues to commit fraud.
Be Diligent About Your Money
If you stay in the marriage, note that it will take some time to rebuild trust in your relationship. To protect your finances, consider separating your income from your spouse’s for a while. Open a new checking account in only your name, and discuss how you plan to hold your spouse accountable for their actions. Detail the steps you can take to merge your finances again, and start to mend your relationship.
Financial infidelity is extremely serious. From this point forward, you will need to closely monitor your credit and make sure your spouse has stopped taking advantage of your finances.
Pull a credit report each year, and consider registering for identity theft protection to keep tabs on the situation. Most credit monitoring apps offer this kind of services, so you can sign up and start protecting yourself today.
