Blog
How to Split Stock Options and Restricted Stock Units in Divorce
Partner Lindsey Obenhaus shares how stock options and restricted stock units are divided in divorce.
Get Started Online
Save time and costs. Before your consultation, use our confidential online questionnaire to receive a personalized information pack in minutes.
Schedule a Consultation
Schedule an in-person or remote consultation with one of our experienced family lawyers by calling us or filling out the “contact us” form.
Specialty tag(s): Complex Property
P. Lindley Bain | October 27, 2022
Your credit score and ability to obtain credit can have a significant impact on your life post-divorce. It can affect qualifying for a new credit card, car loan or home loan, refinancing an existing home loan, or establishing a line of credit. Follow these steps to protect your credit score and make your financial future more secure.
Examine every credit card item or loan item on your report. Be alert for any credit cards that you might not be aware of and balances that should be paid in the divorce process. Close all joint credit cards and joint credit accounts before the divorce is final. Address any credit accounts that cannot be closed immediately in the divorce decree, i.e., a car loan or home mortgage. Insert provisions requiring the spouse taking the asset to either refinance or sell it if he or she is unable to refinance the note.
Whether made by you or your spouse, late payments on any credit account in which you are listed as a borrower or authorized user will likely be reported to credit agencies. Remove yourself from any and all accounts in which you are an authorized user and confirm with a letter from the lender or financial institution. Then run your credit report again to make sure it was removed.
If you are the non-moneyed spouse, apply for a credit card in your name only prior to finalizing the divorce so that you can use your spouse’s income. If you do not have income or enough income post-divorce, you may have difficulty qualifying for a credit card.
Credit card companies look to the debtor for payment and do not consider divorce decrees. Therefore, if the credit card debt is in your name, structure a settlement where the debt is paid off in full at the time of the divorce or you receive other assets to compensate you for taking on that debt. Another option is to have an enforceable secured contractual payment provision in your decree that obligates your spouse to pay you the credit card payoff payments. Then you pay the credit card company directly.
If you intend to purchase a home or car or refinance a mortgage, it may be in your best interest to structure your divorce settlement so that you have a continuing income stream from your former spouse in the form of contractual alimony for a period of time. Alimony counts as income in qualifying for credit or a loan.
Due to high-interest rates on credit cards, it may be in your best interest to sell assets or structure a settlement to pay off credit card debt instead of making monthly payments of mostly interest.
Establishing a good credit score is an essential, but often overlooked, part of planning for post-divorce life. Talk with your family lawyer about strategies to protect your credit, and consider consulting with a qualified financial planner to develop a long-term plan. Our Dallas, Plano, and Austin Family Law attorneys are here to help you make the best decisions for your financial future.
With a background in finance and negotiation, Lindley Bain is exceptionally skilled in the division of complex assets, high-conflict cases, negotiated divorce, pre-and post-nuptial agreements, and divorces that involve mental health issues. She is Board Certified in Family Law by the Texas Board of Legal Specialization. Lindley has been named to The Best Lawyers in America© in the field of Family Law since 2015 and is also one of the select few attorneys to be named a Fellow of the prestigious American Academy of Matrimonial Lawyers. Lindley is the firm’s managing partner, a testament to the respect she has earned from her colleagues and her business and leadership acumen. Lindley practices in Dallas and Austin.
Our attorneys are experienced in all aspects of family law and will guide you through each step of the process, ensuring you have the information you need to make wise decisions and prepare for the future.
At Goranson Bain Ausley, we strive to deliver clarity about what comes next and confidence that you and your family’s future are more secure. Contact our team and discover how we can help you.
How to Split Stock Options and Restricted Stock Units in Divorce
Partner Lindsey Obenhaus shares how stock options and restricted stock units are divided in divorce.
Get Started Online
Save time and costs. Before your consultation, use our confidential online questionnaire to receive a personalized information pack in minutes.
Schedule a Consultation
Schedule an in-person or remote consultation with one of our experienced family lawyers by calling us or filling out the “contact us” form.