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Your divorce might impact your credit history and score

Most people use credit for a lot of things these days. Some might not even really think about how they are using it. Instead, they just get what they need and pay the bills when they arrive. Those going through divorce, however, may need to consider how the divorce will impact their credit scores going forward.

There are many ways that divorce can impact your credit. If you have concerns, you should review the following points and determine how they might apply to your case:

Missed payments on joint debts

You can control what bills you pay, but you can't control what your ex does about the bills for which he or she is responsible.

What might happen if those bills aren't paid on time? Any late payments will reflect negatively on your credit as long as you are on the account. Unfortunately, there isn't too much you can do about this unless you are willing to pay off all the bills yourself.

Change in income-to-debt ratio

When you are living on just a single income, your debt-to-income ratio is going to reflect that change. It will look like you have a higher debt ratio what you might actually have. This is because the full balance of joint accounts will count against you, even if you are only responsible for some of those accounts. This can make it more difficult to obtain new credit, even if you are actually able to afford it.

The civil process

Because the division of debt in a divorce is a civil matter, creditors aren't required by law to abide by the terms of it. This means that they can still hold you accountable for balances even if the court order for the divorce says the debts belong to your ex.

One way that you might be able to protect your credit is to try to close all joint accounts. This might not be easy, but you can try to get creditors to move the balances to individual accounts so that your credit will only be impacted by the bills you don't pay.

In some cases, you might be able to sell some assets so that all joint debts can be paid with them. This might be preferable if you don't trust your ex to make the payments and you don't want to be saddled with the full balances yourself.

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Reppucci & Roeder Attorneys at Law | 5727 N. 7th Street, Ste. 205, Phoenix, Arizona 85014 Phone: (480) 900-5538 Map & Directions
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