Divorce And Credit
July 16, 2014
We know that getting divorced is a difficult decision and can be a very trying time. It can cause heartache and hurt for a family and can leave you in a complicated financial mess. When you get divorced it’s not only the family that is splitting but all the assets and debts as well.
Recent studies have shown that when most couples get divorced they have almost no idea the impact it can have on them financially. They may understand that one spouse may keep the house while another will keep the car but what about the credit cards and the credit card payments? How will your debt be divided?
This is a question we cannot exactly answer. If you are having an amicable breakup then how your finances are handled can and should be decided by you as a couple. If you are not having an amicable break up then that decision may be left in the hands of a judge. With a judges ruling you may find yourself in a situation that you are completely prepared for.
It is actually not uncommon for a judge to rule all the credit card payments as the responsibility for just one of the spouse. This happens in cases where that spouse may not even have been on the card or rang up any of the charges. If this happened to you would you be able to make all the payments? What if the ruling happened the other way, and your spouse was responsible for the payments on your cards? You may not be aware that if your ex misses the payment your credit can still suffer.
The truth is the lenders don’t care that a judge has changed the responsibility of who should pay. They just care that the debts are paid and if they aren’t they will report that late payment for the person listed on the card.
This doesn’t judge apply to credit cards either but any debt as well. We have seen many messy divorces lead to repossessions, foreclosures, and judgements on accounts. This can destroy a credit score for many years making it very hard to move on and start fresh.
If you have decided to go through a divorce, we know it can be very difficult, but try to take a step and look at your finances. See what debts you have, and make a plan for any eventualities. If you have already gone through a divorce and have suffered some credit effects you can call us and speak to a representative who can go over your credit reports and devise a plan to get you back on track.