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Regular Contributor
ktl55
Posts: 203
Registered: ‎04-03-2007
0

credit and divorce

How does divorce play into hurting your credit? I mean besides the obvious of having joint accounts that go unpaid. But does simply getting divorced ruin your credit? What if you have no accounts together? I've read and heard people say..........."divorce ruined my credit". Was it divorce or the joint accounts that came with divorce?
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: credit and divorce

Pay the joint accounts off and close them. Divorce in and of itself does not ruin your credit. A nasty vindictive partner can wreck havoc though so if possible try to remain civil as it only benefits both partners. Good luck.
Regular Contributor
ktl55
Posts: 203
Registered: ‎04-03-2007
0

Re: credit and divorce



smallfry wrote:
Pay the joint accounts off and close them. Divorce in and of itself does not ruin your credit. A nasty vindictive partner can wreck havoc though so if possible try to remain civil as it only benefits both partners. Good luck.


thanks but I'm not getting divorced. I've just read posters say "divorced recked my credit" and then yesterday my husband I were at a car dealer and the saleman said "my credit is bad; I just got divorced". So I didn't know if your divorce status was on your credit report or something. Thanks for your response.
Moderator Emeritus
Tuscani
Posts: 6,182
Registered: ‎03-29-2007
0

Re: credit and divorce

Established Contributor
dog
Posts: 560
Registered: ‎05-03-2007
0

Re: credit and divorce

one of the worst side effects of divorce and the ruination of credit is that creditors typically ARE NOT bound by the orders of a local family court as to who is responsible for a debt post-divorce.  although your divorce decree may grant your spouse possession of the home and responsibility for the mortgage, if your spouse defaults you are still responsible.  also, the mortgage will still show up as your tl on your reports, often preventing you from obtaining a new mortgage.  same with credit accounts, medical bills, auto loans, etc.  i used to practice family law, and ALWAYS made sure that joint debts were refinanced by the responsible party before entering into a settlement agreement and presenting the agreement to the court.  if the other party couldnt refinance, then i insisted on a sale of the property. 
 
by the way, i no longer practice in this area of the law, and the foregoing is general legal information and is not to be construed as legal advice. and hell no, an attorney/client relationship has not been formed between me and anyone on this forum via this posting! :smileyvery-happy:
Regular Contributor
MM1234
Posts: 165
Registered: ‎03-18-2007
0

Re: credit and divorce

The best way to keep it safe is to have all accounts Paid off and then closed.

Those that say a DV ruined their Credit may have forgotten to do that - OR - a spouse simply ran up the bills then bailed - OR - a person could have had to take out a loan to pay off a spouse - OR - the person needed to use credit to start over thus running up CCards that in turn hurt their score. Just a few I can think of.
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: credit and divorce

Yes. It sounds like a scary thing to go through. I've been there through my friends divorce. Messy. They spend all the money on lawyers and have nothing to pay the bills. Emotional distress tends to make bills less important.
If we never set higher goals we would never get as far.
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Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
0

Re: credit and divorce



dog wrote:
one of the worst side effects of divorce and the ruination of credit is that creditors typically ARE NOT bound by the orders of a local family court as to who is responsible for a debt post-divorce.  although your divorce decree may grant your spouse possession of the home and responsibility for the mortgage, if your spouse defaults you are still responsible.  also, the mortgage will still show up as your tl on your reports, often preventing you from obtaining a new mortgage.  same with credit accounts, medical bills, auto loans, etc.  i used to practice family law, and ALWAYS made sure that joint debts were refinanced by the responsible party before entering into a settlement agreement and presenting the agreement to the court.  if the other party couldnt refinance, then i insisted on a sale of the property. 
 
by the way, i no longer practice in this area of the law, and the foregoing is general legal information and is not to be construed as legal advice. and hell no, an attorney/client relationship has not been formed between me and anyone on this forum via this posting! :smileyvery-happy:


Do the same laws apply for common-law relationships?
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
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Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007
0

Re: credit and divorce

Do the same laws apply for common-law relationships?

As far as I know common-law marriages are treated exactly the same as if you had a piece of paper saying you are married.
Senior Contributor
Noah_Bodie
Posts: 4,635
Registered: ‎03-11-2007
0

Re: credit and divorce

Divorce, job loss, and medical bills. Big three pathways to ruined credit. It's not the joint accounts in and of themselves. It's usually one or both vindictive persons involved.
 
There are lawyers who specialize in how to financially carpet bomb a spouse into submission during divorce.
 
In the community property states, the rules are somewhat different--although much easier for CAs and CRAs to ruin both spouse's credit if one decides to tank their credit and bring their spouse down with 'em.
 
Common law marriage simply gets you married even though you didn't both say, "I do". If you decide to divorce, well, you're married so all the vindictive nastiness that available to those who did say "I do" is now available to you as well.
 

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