Among the many levels of impact a divorce can have on a person, the financial impacts can be even more severe than anticipated. The move from a two-income household of sharing expenses and household workload to a one-person income and an individual shouldering the burden all on his or her own can be jarring, to say the least. There are also expenses that can be associated with getting through the divorce process and having it finalized. On top of all of this, you may also be wondering whether divorce will impact your credit score.
Will Divorce Impact My Credit Score?
Maintaining good credit can be important for a number of reasons. As such, it should not be overlooked when navigating the divorce process and after your divorce has been finalized. Fortunately, filing for a divorce does not, in and of itself, impact credit scores. Unfortunately, however, there are other things that can happen incident to divorce that can negatively impact a person’s credit score.
For starters, divorce can be expensive. Adjusting to life after divorce can be expensive. Establishing a new workable budget that reflects your new life circumstances can be difficult. As a result, you may find it difficult to keep up with your outstanding debt obligations. When this happens, missed minimum payments and credit collector actions can have a negative impact on your credit score.
Furthermore, it should be known that creditors are not required to honor divorce decrees. During divorce, the marital assets, as well as the marital debts, will be divided. This involves designating certain debts to be paid by either spouse. The problem is, however, that a creditor is not bound to follow such an arrangement. This means that if your spouse has been assigned a marital debt during divorce and fails to meet the required payments on the debt obligation, the creditor can still go after you for nonpayment and this will impact your credit score.
Joint accounts will also stay on your credit reports. Divorce does not trigger an automatic dissolution of the joint accounts you may have opened with your former spouse. You will be responsible for removing your name from such accounts so that they do not keep coming up on your credit report. So, be sure to remove your name from any account in which you are listed as a joint owner, cosigner, or authorized user, preferably prior to getting divorced. As long as your name appears on these accounts, you will expose yourself to personal responsibility for them.
In order to protect your financial well-being and your credit score, be sure to make a workable budget reflecting your post-divorce circumstances. Try to maintain a civil relationship with your spouse through divorce proceedings and try to work together to pay off and close any joint accounts. If this is not a workable option, at least try to convert any existing joint accounts to an individual account. It can be helpful to contact creditors and discuss options that lenders may make available.
Florida Family Law Attorneys
At Orlando Family Team, we do not want to just see our clients survive divorce. We want to set them up to thrive in their post-divorce lives. This includes shielding them from the potential negative financial impacts of divorce. Contact us today.