When Divorce Wreaks Havoc on Your Credit

 Posted on June 02, 2016 in Divorce

A person going through a divorce has to deal several emotional issues that arise when ending a marriage—a time when it is very easy to not stay 100 percent focused because of those issues. Additionally, he or she also needs to stay on top of financial matters.

A divorce is like the death of a marriage. As you are going through the grieving process and dealing with potentially heart wrenching issues like child custody and who gets the family home, the whole process can wreak havoc on your financial standing before you even realize it.

Many married couples not only have joint bank accounts but joint credit cards and loans (such as a mortgage) as well. One of the most common financial issues that occurs when a couple has divorced is that these accounts still exist. Moreover, the spouse who is supposed to have taken financially responsibility for the accounts either makes the payments late or stops paying anything. This not only damages their credit, but it also damages the other spouse's credit because his or her name is still attached. Therefore, this makes the spouse legally and financially responsible. Creditors do not care about your divorce agreement. They just want their money.

In order to avoid this issues, make sure all joint accounts have been closed and/or transferred once a divorce is final and you are legally able to do so.

Unexpected divorce expenses can also affect your credit. This can be particularly true when there is a child custody battle that dragged on. Complex family law litigation can get expensive and many people fall behind in their bills in order to cover attorney and court costs. It is a smart idea to create a post-divorce budget to see exactly where you stand financially and how far behind you may be with your creditors. Cutting the extras out in order to get caught up may be necessary for a while.

If you have fallen behind, it often pays to contact the creditors directly and see if you can work something out in order to get caught up. Ignoring the arrearage you have built up will only hurt your credit score. This can have a strong impact on any attempt you may have on applying for a mortgage or even a rental application for an apartment.

If you are beginning the divorce process, it is important to have an experienced DuPage County divorce attorney representing you. Call Stock, Carlson & Asso. LLC at 630-665-2500 today.

Source:

http://money.usnews.com/money/blogs/my-money/articles/2016-04-14/5-ways-divorce-affects-your-credit