Be Careful: Divorce Can Damage Your Credit Rating
If you are going through a divorce, or are thinking about filing for divorce, you may already be prepared to deal with increased stress in the weeks and months ahead. However, what a lot of people don’t realize is that divorce can cause serious credit rating problems even years down the road.
Beyond the obvious financial-related divorce issues such as alimony and child support, divorce can also affect your finances, and your financial status, in other ways. One of the most serious ways in which a complicated divorce can profoundly damage your financial status going forward is by indirectly impacting your credit history and your credit score.
Many divorces are thorny and hard to work out because the spouses’ financial affairs are convoluted and messy. As a result, it becomes difficult for the spouses to sort out exactly who is responsible for certain financial obligations. Here are some of the most common ways that your credit history and your credit score could get tied up in a divorce:
- Joint Bank Accounts: Most married couples have joint bank accounts. Although this typically makes it easier for attorneys to determine what constitutes “marital property,” it can also cause problems when the spouses don’t take steps to close the account or make sure that only one spouse remains as an authorized user on the account after the divorce is finalized. Failure to take these steps can lead to serious credit problems for one or both spouses in the future.
- Confusion about Obligations to Lenders: After the divorce is finalized, it is important for the exes to be fully aware of who is responsible for paying off certain lenders. Additionally, the spouses need to contact credit card providers, banks and anyone else to whom one or both spouses may have financial obligations going forward.
- Bitter Ex-Spouse: Sometimes a particularly contentious divorce can result in one of the spouses feeling a sense of anger against the other. It is not uncommon for a bitter ex-spouse, or soon-to-be ex, to intentionally accrue significant debts prior to the official dissolution of the marriage as a way of destroying the other spouse’s credit rating. Although the angry spouse will also destroy their own credit rating, they may not be thinking clearly or they simply may not care.
Protect your credit rating and your credit history. Regardless of the nature of your divorce, it is important for you to have an experienced divorce and family law attorney on your side throughout the process. A qualified divorce lawyer can assist you with immediate concerns like asset division, alimony, child support and child custody, as well as long-term issues such as your individual and joint financial obligations going forward.
If you are considering filing for divorce, or if you have already started the process of getting divorced, the experienced NJ divorce attorneys at Graziano & Flynn, P.C. can provide you with experienced and skilled legal representation. Contact us today to discuss your case or schedule a consultation at our Cherry Hill office.