Going through a divorce means having to unravel yourself from your ex. While some aspects of this are easy, others are a bit more complex. One area that many people don’t think about as they’re divorcing is their credit.
While divorce isn’t a factor considered on your credit report, there are some ways that it might impact it. For example, the loss of your spouse’s income could mean that your debt-to-income ratio isn’t as good as it was during the marriage.
What other factors impact your credit?
One key factor that can affect your credit occurs when your ex is ordered to pay certain debts and fails to meet that obligation. A divorce is a civil matter that creditors aren’t a part of. Because of this, creditors don’t have to abide by the divorce decree terms. This means they can still hold you liable for the debts assigned to your ex in the divorce.
It’s possible for some people to avoid that possibility. If there are assets that can be liquidated to pay off all marital debts, you can avoid your ex being able to affect your credit. You won’t have to worry about what will happen if they don’t make the payments as they should.
Anyone who is going through a divorce should make decisions based on all the ways the available options might impact their future. It’s imperative to think about how the property division settlement may impact your credit. It might not be easy to figure this out, but it can help you considerably as you work to rebuild your life after the divorce.