Divorce is a difficult enough situation on its own. Yet when it comes to a particularly contested divorce or one that involves a higher amount of marital assets, protecting your credit only adds to your laundry list of stressors.
Yes, divorce can negatively impact your credit. However, as long as you and your legal team plan for potential pitfalls, it’s possible to avoid these credit crises.
You May Have Less Income
Usually, when a couple gets divorced, both parties will end up with less income to their names.
Someone who isn’t prepared for this adjustment can fall behind in monthly payments and end up with negative marks on their credit.
During the divorce process, work closely with your divorce lawyer and a financial advisor to estimate what your takeaway in assets will be and how you should best manage your finances.
Refinancing property is something that usually happens after a divorce. Keep in mind, if you are the refinancing party there will be a hard check into your credit.
Any time there is a hard check into your credit, your score temporarily dips and narrows your opportunities for any new credit lines in the immediate future.
Unknown Accounts can Impact Your Credit
Sometimes a spouse will have put their future ex on a credit account without their knowledge. If these account details aren’t disclosed during negotiations, the victimized party could end up with unnecessary debt after a divorce or have ruined credit if their ex decides to quit paying their monthly bills.
Joint Payment Problems
Joint debt is a reality during divorce. If your ex decides to stop paying their fair share, both of your credit scores will be affected unless you end up taking on their half of the monthly payments.
One Income = Possible Decreased Credit Limits
When two parties split up, the decrease in individual finances can lead to decreases in a person’s credit limits. When these decreases happen, people who use their credit often could find themselves over the limit and in danger of tarnishing their credit score.
Before your divorce is final, make sure to set some money aside and pay down as much of your credit card debt as possible. This way, if a credit shift does occur, the only impact is to your limit and not your actual score.
Divorce Payment Confusion
Sometimes the amount of information in your divorce decree can be overwhelming. It’s easy to lose track of payment obligations and accidentally fall behind on your financial responsibilities.
If you feel confused, reach out to your lawyer and schedule an appointment to iron out the exact financial responsibilities that landed on your shoulders during your divorce.
Nilsson Legal Group Helps Preserve Your Post-Divorce Credit
If you are going through a divorce that will likely Impact your credit, let the divorce lawyers at Nilsson Legal Group help prepare you for financial changes.
We’ve seen it all and can help you craft a final decree that ensures your financial needs are satisfied. Contact us today to learn more about our approach to different divorce issues.
We’re ready to help you start the next chapter of your life on financially stable ground!