If you are going through a divorce, you have a lot to think about. It might surprise you to know that you have to think about your credit. This is something that you have to consider as you go through the property division process because the decisions that are made in this process can potentially have an impact on your credit score.
When you and your ex are dividing property, you have to divide the assets and the debts. These debts are where the harm to your credit can sneak into the picture. The divorce settlement that spells out who gets what and who is responsible for what is a civil matter. That means that only you and your ex are bound by the terms. Creditors aren’t bound by the divorce settlement.
Because the creditors don’t have to accept the terms of the divorce, they can still hold you financially accountable for any joint accounts that you and your ex had — even if your ex was supposed to pay for the bills. In order to avoid your ex ruining you financially, there are some things you should consider.
The first thing is that any joint account should be paid or transferred to individual accounts as soon as possible. If you and your ex are able to, each of you should transfer the balances that you are responsible for into accounts that only have the person’s name who is supposed to pay that bill. This can sometimes be difficult because creditors might be unwilling to do this or they may tell you that you need to apply for a new line of credit.
As you go through the property division aspect of your divorce, you need to learn how each option is going to affect your future. This can have an impact on the choice that you make, so you should make sure that you fully understand.
Source: FindLaw, “Credit and Divorce,” accessed Nov. 04, 2016