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Credit woes that may be caused by divorce

On Behalf of | Jan 3, 2018 | Family Law |

California estranged couples may find that getting a divorce may influence their credit score. After a divorce, a person may have less money to pay bills and meet other financial obligations. If a person’s salary goes down, it may result in a credit card company reducing his or her credit limit. In some settlements, one person is responsible for more of the debt than the other, which can make it harder to keep up on one income.

Joint accounts may not be closed after a divorce is finalized. If the account remains open, both parties to the credit card or other joint account are responsible for any balance on it. In some cases, the person who is responsible for paying down that debt forgets to do so or simply refuses to do so.

Credit scores could also be impacted by refinancing a home in a divorce. If this occurs, a person’s credit score may be harmed temporarily by the credit check the lender may run. Furthermore, taking on a mortgage will represent an increase in a person’s debt load. An increased debt-to-income ratio could mean a reduced credit score for months or years. A lack of communication or confusion over the divorce agreement may result in a situation where bills aren’t paid, which may harm an individual’s credit score or history.

During the divorce process, it may be wise to talk with a family law professional. Doing so may make it easier to learn more about going through this process and what financial ramifications it could have. An attorney may be able to help a client retain a larger share of marital property or other resources needed to maintain a reasonable lifestyle.