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Divorce issues: How divorce affects credit

Thursday, June 29, 2017

Divorce can be a complicated process, bringing up many challenges. The potential impact that divorce issues could have on the credit score of both parties is an important concern. While the fact of a Texas divorce does not have a direct effect on a credit score, the consequences can still influence the credit of both parties. This has much to do with the number of shared debts parties to the proceeding may be facing. 

In a divorce, the couple typically divide financial responsibilities, including debts. A court may rule that one party is specifically responsible for a particular debt, (e.g. a credit card), but this could cause collateral issues for the other party's credit if the spouse fails to pay down that debt on time. Since both names are still attached to the debt, even a court decree may not be enough to keep creditors at bay. 

As a result, it can be helpful for both parties to have identical copies of original loan documentation and card holder agreements. This way both parties "start on the same page" and understand their responsibilities under the law. If one or the other spouse later reneges on a debt, this documentation may be helpful in resolving any ongoing problems. Transparency between account holders can mean all the difference in the world when negotiating with creditors. 

Divorce issues are seemingly unavoidable. However, it is possible to navigate even the most strenuous of these issues with the correct backing and support. Seeking the assistance of a Texas attorney experienced in handling family law proceedings can help to mitigate these issues now and moving into the future. 

Source: Yahoo Finance, "Does Getting a Divorce Hurt Your Credit?", Brooke Niemeyer, July 2, 2016

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