Division of Debts in Divorce has impact on credit rating
On behalf of Kathryn Wayne-Spindler & Associates, PC posted in Property Division on Thursday, April 16, 2015.
Conflict is not uncommon during divorce in Michigan; this is particularly if two people cannot see eye-to-eye on how to split their financial assets or divide their property. Unfortunately, not only can a divorce proceeding involving assets be burdensome emotionally, but it can also affect a person’s credit score. This can make it more challenging for the person to borrow money independently in the future.
When dissolving a marriage, two people end up having to split joint assets as well as debts. It is therefore wise for people to get their credit reports so that they know exactly which bills appear on them and thus their responsibility for these bills. People who are authorized users on a credit card are typically responsible for the credit card balance; however, they may wish to get themselves removed from this account if they are concerned that their exes may not pay on time.
When it comes to joint accounts, it is expedient to close them from future purchases during the divorce process. Then, it is beneficial to pay off any outstanding balances as quickly as possible. It is worth noting that one is legally responsible for repaying this joint debt until it is totally paid off.
Because the divorce process can have serious financial implications, an applied understanding of divorce law in Michigan is paramount. Proper legal guidance may help individuals to approach matters such as the division of debts in divorce in a way that is most favorable for them long-term. It is within the rights of both individuals who are going through a divorce to strive for a settlement that will satisfy them while also meeting the other party’s needs.
Source: Forbes, “Getting Divorced? Do Not Ignore Your Credit Score (and How to Rebuild it if You Did)”, Emma Johnson, April 8, 2015