Divorce presents several emotional and financial issues. However, many soon-to-be exes in Georgia may overlook the potential impact on their credit scores. Most married couples have joint accounts and joint debts, like shared credit cards, loans and mortgages. While the divorce decree could make one spouse responsible for the repayment of a joint debt account, this does not affect the parties’ contract with the lender.
If the party made responsible by the divorce decree fails to pay the debt, the other spouse’s credit could be negatively impacted. There are steps that people can take to protect their credit scores during and after divorce. For example, it’s a good idea for people to apply for separate credit cards and then close joint cards. Closing the earlier cards first can cause a credit score reduction that could hurt new credit applications.
Additionally, the parties should work through their joint debts together if they can. Any debts that cannot be paid off entirely should be placed on inactive status by notifying the lender that no more charges should be allowed on the account. If the spouses are authorized users on each other’s accounts, they should have themselves removed from those accounts. For joint mortgages, it may be possible to have one spouse’s name removed from the mortgage or have the spouse that keeps the home apply for new financing.
A spouse who is approaching or going through a separation might want to consult with a lawyer. A lawyer who handles divorce cases could provide assistance by gathering and organizing the couple’s financial information or by negotiating for a fair property division outcome. Legal counsel might also argue for the client during child custody hearings or draft the petition for divorce.