Divorce can impact every aspect of your life. One way that some people might not realize is that divorce can affect your credit. This isn’t always the case, but it’s critical for you to understand this if you’re ending your marriage because it can have a significant impact on your financial future.
The way that divorce can impact your credit starts with the property division process. During this process, you have to divide the marital assets, but you also have to divide the debts. Those debts are where the impact on credit can occur.
How are debts handled in divorce?
During the property division process, debts have to either be paid off or assigned to one party to pay. Some people may opt to liquidate assets to pay off debts so both parties have a fresh financial start.
One thing to remember if that’s not an option is that creditors don’t have to abide by the terms of the property division settlement. Instead, they can continue to hold both parties liable for the debts if they aren’t paid. This can mean that you could be held liable for any debt that your ex is assigned and fails to pay.
The division of debts might not seem as important as the division of assets. When you consider how this can impact you, it’s easy to understand why this is such an important part of the divorce. Having someone on your side who can assist you with keeping your focus on the logical side of the situation may be beneficial to you.