The reality is that divorces are unpleasant and frequently involve ugly legal battles where only the lawyers win. It’s very common that the credit reports of both spouses become corrupted with late payments, collections, judgments and bankruptcies. This doesn't have to happen but it will take some effort on behalf of both parties to avoid it.
What steps can you take to protect your credit score?
Items to consider if you own a home:
You and your spouse are both financially responsible for anything you signed together: home mortgage, auto loans, credit cards, and tax returns. While one party may be awarded items in a divorce proceeding, that does not legally clear both parties from remaining exempt from signed notes. Non payments will affect both parties’ credit score and show up negatively on credit reports.
If at all possible, maintain a civil relationship during the divorce process so that you can avoid the pitfalls of a vindictive split. Working together to pay off and close existing joint accounts is the best possible approach. If that is not possible, try to convert the account to an individual account when possible. Contact each creditor and explore the options available with that lender. Doing so will help you make a clean separation without financial burdens that could haunt you even after the divorce is final.
Mark Newman - Collections & Business Service Representative