Will divorce ruin my credit?
Divorce can affect many aspects of your life, but one thing you may not have considered is how it affects your credit. To begin with, what is credit? This is the ability of a customer to obtain goods or services before payment based on the trust that payment will be made in the future. There are factors to consider when talking about credit and divorce. Divorce may or may not affect credit depending on several factors.
If you have any joint credit accounts or mortgages with your ex-spouse they have to be paid. After being through with the court proceedings for the divorce, the judge may have ruled out that your ex-husband or wife has to pay a certain amount after the divorce.
You must ensure that you are following up to ensure this is happening, especially if you find that your spouse is not as concerned as he or she should be, since this may affect you in the future. The problem is that you will not have the motivation to pay bills with assets that belong to you. The most unfortunate thing is that if these bills that are in your name do not get paid, then your credit will suffer.
So, if you know your name is on the account you should work hard to ensure they are paid even though probably your ex-spouse was the one who was supposed to make payment. You and your ex-partner may be on talking terms and may agree that you will both honor your financial deal till you are done, but if that’s not the case, you can pay the bills that your ex-partner is not paying regardless of who is responsible, just to avoid it ruining your credit.
After doing this, there are measures you can take to recover your money such as reporting non-payment to the court since your ex-spouse went against the divorce agreement.
Divorce can sometimes be chaotic or messy. A messy divorce may cause you to spend a lot of money on your lawyer making you unable to pay your debts. In other cases, one partner might have been the breadwinner, which in most cases is the woman.
This may bring a lot of trouble since the dependant spouse will have trouble covering bills on his or her own. Being insolvent and the scenario of being left with no one to depend on may ruin credit since it may lead to delayed payments or over-reliance on credit cards.
Payments should always be on time to avoid hurting or ruining your credit due to late payment If your current financial situation makes it impossible for you to pay your bills on time, your credit score may decrease.
If you are in such a situation and wonder what you can do, there are ways in which you can be able to get money to pay your bills. For one, you may find other means of getting employment, working overtime, freelancing, or hustling which will help increase your income or decrease your expenses.
If you are used to living a lavish lifestyle, then you will have to minimize expenses on luxuries such as spending your weekend in a hotel or traveling to other countries, to clear bills. Other options may be moving in with your family or friends, or selling your apartment or car to get stability.
There are cases in which couples will never be friends anymore. They may split up causing a lot of drama however others split up peacefully. Disappointment may cause one to do things that he or she has never done especially to the person who he or she once loved.
If your ex-partner is bitter and annoyed due to the divorce and has access to your accounts he or she may go and take a debt in your name. This is a common phenomenon, especially with the partner who is legally allowed to access the account since he or she is not responsible for payment.
This can be frustrating since your partner may exploit and frustrate you and get away with it just because he or she is legally recognized. The bad thing is that this may happen if that is the only money you have left. You will have to repay the debt that was not taken by you.
Failure to pay the debt may ruin your credit score. The best thing to do after a divorce is to remove your ex-spouse from your credit accounts to make it an individual account as much as you can as early as you can. It is said that prevention is better than cure.
People also say that divorce may cause distress and affect your mental health. You may tend to think that your ex-partner is good and reasonable and will take the divorce positively so there is no need to eliminate him from your credit accounts only to realize that he has a lot of anger in him so it is good to take precautions.
You may decide not to sell the family home. To move the house or property into your name, you may have to refinance the mortgage where the first loan is written off. This can lower your credit score since it requires hard earnings - without support from your ex-partner, earnings may be a challenge.
On the other hand, if you do not refinance, you and your ex-partner will have to clear the mortgage repayments. If you are the person who moves out, you may have a hard time qualifying for a second mortgage to buy a new home.
Once your accounts are separated from your ex, your creditor may decide to lower your limit if he discovers you’re now making much less money. That change can affect your credit score and can cause you to reach your maximum limit quicker than usual.
So, will divorce ruin your credit? Yes, if you have joint accounts, dependent on your spouse or your spouse's name still exists in your credit accounts after divorce. If the above factors do not affect you then divorce cannot ruin your credit.
Cite this paper
Financial Problems Cause Divorce Essay.
(2024, March 27). Edubirdie. Retrieved April 27, 2024, from https://edubirdie.com/examples/financial-problems-cause-divorce-essay/
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Financial Problems Cause Divorce Essay [Internet]. Edubirdie.
2024 Mar 27 [cited 2024 Apr 27].
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