Going through a divorce is an incredibly complex emotional matter, with many complex issues that must be handled with care. However, while determining who will get the home and how you will split child custody, there’s one thing you may be forgetting to consider – your credit! If you’re going through a divorce, understanding what will happen to your credit is critical. Luckily, the following blog explores what you should know about these complex issues to ensure your financial future looks bright. Additionally, you’ll discover how an experienced Arroyo Grande consumer lawyer can help you navigate these complex issues.
Does Divorce Hurt My Credit Score?
It’s important to understand that filing for a divorce or finalizing an agreement will not impact your credit score. This is because a change in marital status does not automatically impact your credit.
However, if you fail to take the necessary steps during your divorce, your credit can suffer. In California, all assets obtained during marriage are deemed joint or marital property. Because the state adheres to community property laws, all assets are distributed evenly between spouses. However, this also encompasses your debt. As such, you and your spouse will each be assigned 50% of the debt taken out during the marriage.
Just because the debt is split evenly does not mean you’re off the hook. To creditors, both parties are still liable for the debt. As such, if your spouse misses a payment, you can be held liable. Additionally, if your spouse racks up credit card charges on a joint account to spite you, in the eyes of the creditor, you are responsible for those funds.
What Can I Do to Protect Myself?
If you’re going through a divorce and are worried about what could happen to your credit, taking the necessary steps to protect yourself is critical. Generally, the first thing you’ll want to do is to request a copy of your credit report to see what accounts are joint and which are separate. Once you have determined this, you’ll want to close the account by paying off the remaining balance or separate the accounts. Additionally, if your spouse is an authorized user on a credit line, revoke their access.
For larger debts like mortgages, you can work with your spouse to determine the best course of action. For example, you may decide to sell the home, pay off the mortgage, and split the remainder of the money from the sale, or you can take over their portion of the mortgage by refinancing.
Regardless, it’s in your best interest to connect with an experienced attorney as soon as possible to discuss your concerns about your credit during your divorce. At Loker Law, we understand how important these matters are to you, which is why we will do everything in our power to help you achieve the best outcome possible. Connect with our team today to learn how we can guide you through these complex times so you can protect your credit.
