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Will your Arizona divorce tarnish your credit score?

When Gilbert area residents decide to divorce, they are often concerned about how the split will affect their financial security. Much of this can be addressed in conversations with family law attorneys--from child and spousal support, to the division of assets and the future of joint property and retirement accounts.

An issue that some forget to consider is credit and the ability to obtain lines of credit following divorce. Although divorce in and of itself does not have a direct impact on a credit score, divorce mistakes can mar credit.

For example, many people assume that the divorce decree--a legal document that lists how assets and debts will be divided--has the power to actually change these responsibilities in the eyes of the creditor. It does not. While this document does say who should now pay what, your creditors are not privy to this information unless you share it.

For example, if the divorce decree states your ex-spouse is now responsible for the American Express account, you need to call and take your name off of the account. If you fail to do this, as far as the credit card company is concerned, you are responsible for late payments and delinquencies. This means the company could try to collect money from you and that they may report negative information on your credit report.

The same is true with auto loans. The car title should only be in the name of the person who is going to keep the vehicle, and the loan should be refinanced only in the name of the person who is going to be responsible for payments.

Mortgages are a bit trickier, and many say the best solution is to sell the home. However, this is not the best option for everyone. In cases where one spouse is living in the home and paying the mortgage, but both names have to remain on the mortgage for one reason or another, it is important for the non-paying spouse to keep an eye on payments.

These are just a few things that should be done in the aftermath of divorce to ensure your ex's financial missteps do not result in your misfortune. When finalizing a divorce decree, it may be wise to ask your family law attorneys what moves you need to make in order to get your creditors on the same page.

Source: MSN Money, "How divorce affects your credit," Rob Berger, Aug. 9, 2012

  • Our Gilbert and Queen Creek, Arizona, law offices handle divorce cases. To learn more about this aspect of our family law practice, take a look at our divorce page.

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