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Debt After Divorce Can Affect Your Credit Score

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Divorced or not, we all understand the importance of having a high credit score. Unfortunately, when Divorce Decrees are drawn up some simple attorney errors or oversights can result in long-term negative affects on your personal credit.

Divorce Decrees identify who is awarded what debt. It is essential, therefore, that debts that came from joint accounts are only in the person’s name that is awarded that debt per the decree. In most cases the decree is a simple agreement between divorcing couples. It does not separate liabilities – and that’s where the problem lies.

If, while you were married, your significant other had created some debt on your joint accounts, both of you are affected. Each of your social security numbers are attached to the obligations — and all three credit bureaus have this information.

When you decide to divorce, a Divorce Decree is not the best way to handle this debt. The reasons become obvious when you explore a number of likely possibilities. What if, a couple of years after the divorce, your ex decides to be late on a debt obligation that is still reporting in your name? Imagine what will happen to your credit score!  It can suddenly drop 150 points – and you may not even know it!

Unfortunately, this is not uncommon. And the problem is now yours even though the debt was awarded to your ex.. What if it’s a house at stake and your former spouse decides to let it go to foreclosure? Are you aware that you cannot buy a home for the next three years because of the foreclosure record on your credit report?


Here’s some sound advice offered by Mike Clover of www.creditscorequick.com. Clover insists that divorcing couples should never rely on the other spouse to pay bills that were awarded to them per Decree. In essence, this is a disaster waiting to happen. He says these issues must be tackled up front so you are not vulnerable once the divorce is final.

If you are among those who have already made this mistake, it is important that you go back to court to get those debts off of your name. If a house is involved, especially, get it refinanced out your name or sold, depending on the situation. If your ex is behind on the mortgage you might want to go back to court and take over the mortgage payment in return for having the house awarded back to you.

Divorce is tough enough without having to deal with financial crises in the months and years to follow. Be aware. Make sure you don’t have debts in your name that get awarded to your ex. Don’t put him or her in the position in which they can ruin your credit. If you are not sure about your credit rating, get your current credit report with credit scores to make sure there is no damage done. There are many resources on the internet for accessing this information. Don’t put it off!

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Rosalind Sedacca, CCT, is founder of the Child-Centered Divorce Network and author of How Do I Tell the Kids About the Divorce? A Create-a-Storybook Guide to Preparing Your Children — with Love! For her free ebook on Post-Divorce Parenting, coaching services and other valuable resources on divorce and parenting issues, go to: http://www.childcentereddivorce.com.

© Rosalind Sedacca All rights reserved.