Most people have heard horror stories about
divorce and how it led to unsurmountable debt or bankruptcy, or both. Often, these
tales are frightening enough that unhappy spouses stay in hollow marriages,
afraid a divorce would ruin their credit and their financial stability
for years to come.
While divorce can affect someone’s credit, the divorce itself does
not do the damage. This is because divorce does not impact a person’s
credit score. What does affect credit is how spouses conduct themselves
before, during, and after a divorce.
If you are concerned that filing for divorce will damage your credit, there
are strategic actions that you can take to protect your FICO score so
it will not be impacted by the divorce. Continue reading as we explain
this in further detail.
Resolve All Joint Debts
As someone who is divorcing, your first concern should be joint debts,
such as auto loans, credit cards, and mortgages. If possible, close all
joint accounts or place them in one spouse’s name alone. If you
remain on a debt, such as the mortgage and your spouse agrees to pay it
but they default on the loan, the lender can go after you for payment.
Creditors do not care what a divorce decree says, or which spouse is obligated
to pay a debt. So, if your ex fails to pay the car payment or the mortgage
and your name is on the loan, the late payments will be reported on your
credit and the creditor can take you to court for payment. The solution:
Resolve all joint debts before the divorce is final so you can make a
clean break and start with a clean slate.
If your name does remain on a debt after the divorce and your spouse agrees
to pay it, check the account each month to ensure that it gets paid. If
your ex cannot pay the debt, your best option is to pay it. Otherwise,
your credit will be impacted. It’s better to pay the debt when it’s
due and take your ex to court later.
Remove Authorized Users Immediately
If your spouse is an “authorized user” on any of your credit
cards, you should remove him or her immediately. If you don’t remove
them as an authorized user, nothing is stopping your spouse from maxing
out the credit cards in your name, and without
When you get a divorce, protecting your finances and your credit should
be top priorities, and at Samuelson Hause & Samuelson, LLP, we are
highly motivated to protect your assets and credit during the divorce
process. To learn more about our expertise, we invite you to review our
attorney profiles and
Contact our firmto meet with a Long Island divorce attorney!