If you’re thinking about getting a divorce but are worried about the financial consequences of that decision, you’re not alone. Nearly everyone who has ever gone through a divorce in Tennessee has experienced those same anxieties and has asked themselves the same questions about property division, support and other financial concerns that you have. What frequently gets overlooked however, are the various ways in which a divorce can negatively affect a person’s credit if they are not careful.
The first thing to understand is that creditworthiness is not in any way affected by whether a person has ever been married, is married or has gone through a divorce. This means that getting a divorce does not have to affect your personal credit in any way.
Unfortunately, this is not the reality many people experience — mainly due to mistaken assumptions about the actual effects of a property division agreement or court order. The key thing to recognize here is that a divorce order stating your former spouse is responsible for this credit card debt or that auto loan means nothing to the creditors that money is owed to.
If your former spouse doesn’t pay them, you can be certain they’ll come looking to get their money from you and may even garnish your wages or take other legal actions if you refuse to pay as well. The problem is that creditors are well within their rights to do that if your name is still on the account.
The solution? Once you know who is going to be responsible for various debts divided in connection with a divorce, call or contact those creditors to have your name taken off of the accounts. In the case of an auto loan, this may require refinancing the vehicle but that isn’t generally difficult to arrange.
When it comes to the family home, the easiest solution is to sell it and divide the proceeds accordingly. In most divorce cases, however, one spouse continues to live in the home after the marriage is over. The problem for the spouse who moves is that it’s frequently very difficult if not impossible to get their name removed from the mortgage.
The only solution for many people faced with this situation after a divorce is to keep tabs on the mortgage account to make sure payments are being made as scheduled while monitoring their own personal credit scores regularly.
Source: MSN.com, “How divorce affects your credit,” Rob Berger, Aug. 9, 2012