Minnesota couples may find that getting a divorce can be a complicated and emotionally difficult time. They should know that the impact it can have on their credit can make the process even worse. Refinancing the family home may be necessary if one party has been granted sole ownership. Mortgage lenders will examine credit histories when refinancing loans, and the person whose name will be on the deed may incur substantial new debt that may difficult to handle for one person.
Assets and debts are not always divided equally during a divorce. One party may obtain more of the marital property but also may be saddled with more of the debt. Another adjustment that may affect their credit is living on just one income. It may be helpful to take time before filing for a divorce to closely examine one’s finances and to create a budget so that bills will be paid on time.
Full financial disclosure is the rule for a divorce, but this does not always occur. To ensure that there are no hidden debts that can negatively impact their credit in the future, divorcing spouses should obtain a credit report for themselves and their spouses. If one party of the divorce is still able to access the financial accounts of the other party, it can result in debts being incurred in the other party’s name.
As soon as a divorce is a reality, it is important that joint accounts are split immediately and authorizations for spouses are removed. A family law attorney can provide further advice and counsel on these matters.