Gainesville, FL Divorce Attorney – Divorce and Your Credit Score
Divorce and your Credit Score – going through a divorce is tough enough without your former spouse wrecking your credit. Learn how to protect yourself with a few helpful tips. As always, it’s best to talk to a skilled divorce attorney before doing anything.
The most important thing to remember is that your credit is one of the most valuable assets you have. Unless you are flush with cash, if you want to buy a home, car, or any other major purchase, you have to get a loan from a bank. When a bank decides whether or not to give you a loan, they look at your credit score. A low credit score means you are less likely to repay the loan. Because your borrowing power can be wrecked by your spouse, it’s important to understand how to protect your credit score during and after divorce.
Know What Assets/Accounts Are Titled Jointly
First, it is important to understand what assets you and your spouse own jointly. It is also important to know what accounts are titled jointly. For example, consider your utility bill. Assume both spouses names are on the bill, but historically the Wife has paid the bill when it comes due. If the Husband assumes the Wife will continue to do so without verification, and the Wife fails to make the payments, the utility bill is going to become delinquent. The Husband is in the dark (pun intended) about the bill and will now likely have a blemish on his credit score, through no fault of his own.
What the Husband should have done is communicate, either directly or through his attorney, to determine who would should be responsible for the bill.
Refinance or Demand Your Spouse Refinance Major Assets
No matter who takes an asset with them after divorce, it is important that Marital Settlement Agreement have language regarding the refinancing of such an asset. Consider this example: two people divorce and one party ends up with the house. Although the parties transfer title to that person solely, if there is a mortgage on the property in both spouses names, then they are both still responsible for paying the mortgage. If the spouse who keeps the home stops paying the note without first refinancing, the other spouses’ credit will be wrecked!
It is important to have language in any settlement agreement concerning major assets that that refinancing be accomplished within a certain time frame to ensure the other spouse is protected from non-payment of the other spouse.
If you have questions for Gainesville, Florida divorce lawyer Nick Hamm, contact him today at 352-888-6142.