It probably wouldn’t be difficult for you to find other Tucson residents whose finances weren’t exactly stellar after a divorce. Nearly every person who gets a divorce suffers some form of financial issues after the end of a marriage.
Anytime the same financial resources go from supporting one household to supporting two, there will be some adjustments needed. During the divorce process, most people focus on dividing assets, creating parenting plans and the like. What they tend to ignore is how the divorce will impact their credit and finances over the long haul.
What divorce can do to your credit
If you were married for any length of time, you probably opened joint accounts with your spouse. Combining your income often allows you to receive more monetary resources than if you went by your income alone. That may work well during your marriage, but it could cause you problems during and after the divorce. If you fail to pay attention to the potential credit pitfalls of your divorce, you could encounter issues in the future.
Some matters to consider include the following:
- The joint accounts you opened during your marriage remain on your credit. If your spouse fails to honor those financial obligations taken in the divorce, your credit could suffer as well.
- Creditors probably won’t care what your divorce decree says and don’t have to honor it. All creditors care about is getting paid, and if your former spouse fails to pay a debt he or she agreed to do in the divorce, the creditor could still come to you for payment.
If you are already struggling to adjust to your new financial circumstances, getting calls from creditors won’t help.
So, what can you do to minimize the impact?
The most important thing you can do is pay attention to what your credit will look like after the divorce. If you have joint accounts, do what you can to close them. If your divorce is amicable, it might make sense to pay off, or at least pay down, those joint accounts prior to filing. You and your spouse could attempt to separate those accounts prior to the divorce as well. Putting those joint accounts into the separate name of the party willing to take on the debt could minimize the impact the account will have post-divorce.
Properly dividing assets during your divorce is an important part of securing your financial future. However, it would be a mistake to ignore how your marital debts could sabotage those efforts.