Going through a divorce is a significant transition, and some people don’t realize just how consequential it can be. One area of life that might be affected in the event that you choose to divorce is your credit.
You’ll work out who gets what elements of your marital estate as part of the property division process. While many people focus on assets, it’s important to understand that marital debts also need to be divided. This is a challenging and somewhat risky situation because it may affect your financial future in negative ways if the process is not handled thoughtfully.
Assignment of debts doesn’t matter to creditors
One of the risky aspects of having debts assigned as part of a property division order is that creditors don’t have to abide by that order. Divorce is a civil matter that creditors aren’t a part of, so they aren’t bound by its terms. You can still receive derogatory marks on your credit report if your ex is assigned a debt and doesn’t pay if your name remains associated with that debt.
Selling assets can provide financial freedom
Selling assets and using the profits to pay off debts can give you financial freedom and a clean break from your ex. Even if there are small debts outstanding, it’s a good idea to try to pay off as much as possible by selling off assets, if doing so is possible.
Rebuilding your credit is possible
You may take a hit on your credit score when you divorce because your debt load might be higher. But, you can overcome these shifts in time if you remain responsible with the credit you have.
You must carefully consider the practical and logical aspects of the property division settlement process to determine how you can handle it most effectively. Remember that seeking legal guidance when you have questions or concerns is always an option.