Is divorce bad for your credit? With help from an experienced divorce attorney, it doesn’t have to be.
As readers may recall, couples may be able to resolve their issues in a written settlement agreement that, if approved by the court where the divorce petition was filed, will result in the issuance of the divorce decree. The divorce decree may document certain main points from the settlement agreement regarding property division, child custody, child support, and/or spousal support.
Notably, dividing property as part of a divorce may involve items that relate to one’s credit, such as joint credit cards, joint bank accounts, mortgages titled in both spouses’ names, or other jointly held items, like auto loans. In Tennessee, the court will likely require an equitable division of property.
If a spouse was supposed to pay off certain obligations pursuant to a divorce decree but defaulted, a divorce could indeed be bad for the other spouse’s credit if his or her name is still on the account. Since creditors are generally not privy to a divorce proceeding, they cannot be bound by the divorce decree and will retain a right to pursue collection efforts against all parties listed on the account.
Fortunately, there are steps you can take to protect your credit while your divorce is being finalized. Indeed, the process of applying for separate credit may present an opportunity to learn about one’s credit and obtain a copy of one’s credit report which will list current credit obligations. Our lawyers can provide comprehensive counseling during the divorce process to help spouses protect themselves from unfair actions or even retaliation.
Source: FindLaw, “Credit and Divorce,” copyright 2016, Thomson Reuters