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How to manage credit when a marriage ends

On Behalf of | Apr 29, 2019 | Divorce, Spousal Maintenance

Getting a divorce will not automatically impact a person’s credit score, and an individual’s gender will not necessarily affect his or her credit score. However, there are ways in which divorce can negatively impact how lenders view a Minnesota resident. In some cases, one party will experience greater credit consequences than the other. When a couple is married, they will likely open joint accounts, such as a mortgage or an auto loan, that will appear on both of their credit reports.

After a couple gets divorced, the divorce decree may spell out how the debt is to be repaid. However, creditors are not required to follow the terms of a divorce decree. Therefore, if a joint debt is not repaid, each individual listed on the loan could experience negative consequences. It is often a good idea for divorced people to refinance joint debts or close joint accounts so that they cannot be used in the future.

Divorced couples should try to work with each other to take care of joint debts in a timely manner. Doing so may help each person avoid late payments or other issues that could result in a default or bankruptcy. Individuals who experience credit damage during or after a divorce should know that credit scores and histories can be rebuilt over time.

Issues such as alimony, property division and parenting time may dominate the divorce process. It’s generally a good idea for divorcing couples to work with one another to create a reasonable settlement. Individuals may wish to hire an attorney to help with settlement talks. This may be helpful whether an agreement is reached in private, through mediation or in a trial. A lawyer may help individuals view cases in a factual as opposed to an emotional manner.

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