Although a divorce alone will not ruin an individual’s credit, there are certain financial issues that if left unsolved can have a large impact. In a complex divorce, these issues can often be overlooked by Pennsylvania couples who are looking to come to a resolution of their divorce quickly. With a little care, however, these financial oversights do not need to have long lasting effects.
The manner in which money is handled during and after the divorce is crucial in maintaining a strong credit rating. The first place to look when determining the financial responsibilities of both parties is the final divorce decree. This judgment of divorce in many cases will outline which party is responsible for paying off certain jointly held debts.
Although the divorce order is helpful, this order does not necessarily eliminate the nonpaying spouse’s exposure on certain joint debts. Many couples take out joint credit cards during the marriage and, if they are not diligent in addressing this issue during the divorce, may still be liable if the other spouse fails to pay the bill. By having one of the name taken off the account, this can eliminate the risk of such a problem arising in the future.
Although the final divorce order signifies the termination of a marriage, this does not always terminate the complex divorce issues that may arise after the judge signs it. By taking a careful and calculated approach to all of the financial issues and by seeking the right advice as to how these matters can be properly addressed, Pennsylvania couples can avoid being victimized by credit damage on accounts their spouse is obligated to pay. The best method for achieving this is to keep one’s current and future credit rating in mind while negotiating a divorce agreement.
Source: MSN Money, “How divorce affects your credit,” Aug. 9, 2012