Does Divorce Affect My Credit?
When we work with clients who are planning to file for divorce in Georgia, many are concerned about the different aspects of their finances which divorce can affect. In relation to these concerns, the common questions of debt and credit impact arise and whether or not divorce affects one’s creditworthiness. In some cases, divorce can affect your credit, but in other situations, your divorce will have absolutely no impact on your credit score or your financial history. No two divorces are exactly alike, and as such, without assessing your case, we cannot say for certain whether getting divorced is likely to affect your credit. Generally speaking, Georgia law requires the equitable division of marital property, but an equitable distribution of property does not necessarily mean that your spouse will not be able to damage your credit score.
We can provide you with some frequently asked questions about divorce and a person’s credit score that can help you to understand the kinds of situations in which divorce can affect a person’s credit. We have collated some information from Experian and NerdWallet that will clarify the relationship between divorce and a spouse’s financial record.
Do You Share Any Joint Accounts with Your Spouse?
In determining whether divorce can affect your credit, one of the first questions you want to consider is whether you currently share any joint accounts with your spouse. For example, do you share one or more credit card accounts? Do you have savings accounts or checking accounts in common? Do you have other forms of credit that include both your name and your spouse’s name? If so, if your spouse is responsible for making payments on one of those accounts and fails to do so, or if your spouse runs up new credit on a credit card account, your credit could suffer.
In short, any joint accounts should be closed if possible, and each spouse should open new accounts in his or her own name. For larger credit accounts or high credit card bills, it is important to continue making payments until the court can divide marital property (including debts) accordingly. Even then, if your spouse is responsible for a particular debt and your name is attached to it, failing to make payments can affect your financial standing.
Are You Having Difficulty Paying Your Bills Because of the Divorce?
Many people do not realize just how financially difficult divorce can be. Most married couples are accustomed to paying only one mortgage or rent payment, only paying bills for one household, and sharing other costs. When you get divorced, you end up having to pay for an entire household on your own with only your income.
If you are having difficulty paying your bills as a result of the financial strain of divorce, then your divorce could end up affecting your credit. For example, being a month late on your car payment can affect your credit, as can several months’ worth of late payments on your individual credit card account.
Learn More from a Georgia Divorce Attorney