Heymann & Fletcher

Family law proceeding of divorce can affect credit

The divorce process in New Jersey can understandably be stressful due to the financial costs associated with dissolving a marriage. Although some expenses, such as court costs, are predictable, other aspects of finances often fly under the radar during the family law proceeding of divorce. One of these aspects is a divorcing individual's credit.

Once a marriage has been dissolved, an ex-spouse's financial activities stop having an impact on one's credit. Both parties can freely apply for their own credit cards and loans as individuals and can essentially be their own economic entities. However, depending on the circumstances surrounding the divorce, the ex might still end up influencing one's wallet.

Getting divorced does not immediately alter any agreements that the two parties entered into as a married couple. For instance, if one has a mortgage or a vehicle loan as well as any debt accumulated during the marriage, one is still responsible for these debts. In an ideal situation, the two divorcing individuals will address these debts in their divorce settlement.

In a situation where there is a joint debt, the court might order one's ex-spouse to pay the debt. However, if this person fails to do this, it will negatively affect one's credit, as one might end up in collections. Fortunately, a final divorce agreement may include provisions that address such a situation. For instance, the ex might have to refinance a certain loan by a certain deadline. Appropriate family law guidance may help people to pursue their best interests when dealing with financial matters that can impact their credit in New Jersey.

Source: goodmenproject.com, "How Not to Get Financially Blindsided By Divorce", Zephyr Hill, July 12, 2016

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