Debts and Divorce

Does Divorce Affect Your Credit?

Divorce does not impact your credit directly.  That is to say, getting a divorce alone will not change your credit score.  However, because couples are financially intertwined and have joint debts, divorcing might result in changed credit.

When you get divorced, the court has power to split the debts you have with your spouse well as the assets you have with your spouse.  One important aspects of divorce is paying attention to your credit and debts.

In general, if a debt is in your name, you are responsible for it.  That means credit cards and loans you have individually and credit cards and loans you shared jointly with your spouse.  However, your credit report should not contain any loans your spouse had individually, and your spouse will not have your individual loans.

The divorce court might say that one spouse must pay a joint debt.  If that spouse does not pay, the lender can still seek payment from the other spouse.  Even though the court has assigns a joint debt to the other party, the court cannot alter the loan that you have already entered.   If the lender attempts to have you pay the debt, the lender may report it to credit agency.

Steps to protect your credit:

  1. Obtain your credit report. Make sure you have all debts accounted for.  If you notice any
  2. Pay down debt or Refinance debt. Attempt to work into the agreement that both parties pay down their debt as much as possible or entirely.  Attempt to refinance debts such as mortgages to one person’s name only.
  3. If your debts are still too much, or if your former spouse is going to declare bankruptcy, it is crucial that you speak to a bankruptcy attorney.