Divorce can turn a person's whole life upside-down. Not only are the spouses having to pay for TWO households instead of one, the higher-earning spouse may have to come up with child support and spousal support payments.
In the meantime, the spouse who receives these payments is working to become fully self-sufficient. Perhaps they’ve gone back to school, or reentered the workforce after a long hiatus taking care of the couple’s family and home.
No matter your individual circumstances, there is a strong possibility that the divorce has changed many aspects of your daily life. Perhaps your life today, looks very different than it did one year ago.
When you’re getting a divorce, it’s critical that you protect as much wealth as possible and your credit score.
While the divorce itself doesn’t impact credit, there are several aspects of the divorce that could indirectly affect your credit score, so it’s important to know what they are so you can prevent this from happening.
How can divorce affect my FICO?
Ways that divorce can impact your FICO score:
- Your spouse stops paying on the joint credit card accounts (before, during, or after the divorce). If this happens, you’re on the hook to pay these balances in full. If you do not pay these bills, your credit will take a hit.
- Your spouse doesn’t pay the mortgage and your name is still on it. Same as with the credit cards, if your name is on the loan and your spouse doesn’t pay it as agreed, you’ll be held liable.
- A contested divorce put on credit cards can cause you to rack up credit card debt, which will hurt your credit score.
If you’re getting a divorce, we advise that you use marital assets, such as a marital home, a valuable painting, a boat, or an extra automobile sitting in your garage to pay off any debt that you have as a couple. This way, it doesn’t follow you into singlehood.
In closing: create a post-divorce budget, find ways to increase your personal income, and cut your expenditures, as these steps will help you weather the financial storm otherwise known as divorce.
For more financial tips and advice, contact the Los Angeles divorce lawyers at Claery & Green, LLP.