Divorce does not in and of itself cause a negative impact on your credit. As assets and debts are distributed, there may be (and often is) a negative impact to your credit.

Joint Accounts

Like it or not, one spouse can choose to not pay their portion of the assigned debt. Just because the judge says they are responsible, doesn’t mean they will pay the debt. Non-payment is reflected on the credit of both spouses.

The key takeaway: Someone has to be paying debts whether they have been deemed the responsible party by the court or not until the divorce is settled or the debt is paid.

You may be able to seek payment for the portion you paid on behalf of your spouse.

Split Accounts

Even when a debt is ruled by a court to be separated between spouses or to go to one spouse, it doesn’t mean the creditor knows. In fact, you and your spouse must call the creditors and get the debt placed in the proper name(s). If you don’t separate the debt, whoever is named on the account is responsible for payment, at least according to the creditor.

The key takeaway: Just because there is a final divorce decree doesn’t mean your work is done. You must be diligent in contacting creditors.

What You Can Do to Protect Your Credit

Whether you’re in the middle of a divorce or not, the rules of credit and debt payment are the same:

• Stay current on all debt. This may mean paying your spouse’s portion of debt or sending minimum payments. Track what you are paying and who is responsible. One missed payment can stay on your credit for up to seven years.

• Budget your income and expenses. Your income must exceed your expenses. This may mean taking a second job or moving to a less expensive home.

The more you can do today to stay current on payments, the better your credit will be after the divorce. While we can’t control what your spouse will do, you can take action and do what you can to protect yourself.

Contact Stuart & Blackwell to learn more about how we help our clients through divorce and other family law matters.