Understand How A Divorce Can Affect Your Credit Score

By Pamela K Baker

A good deal too numerous marriages end in divorce these days. Sorry to say the ending of a marriage is not only an emotional battle but it all too often has a enormously damaging consequence on your money also.

Far too frequently these days, a individual who has been a unfailing and conscientious credit risk for many years ends up with vast troubles on their credit following a divorce. One of the main causes of difficult credit for many folks is divorce.

As an party who is married you are often treated as equally responsible for repayment on loans like car payments, credit cards and home mortgages. As you divorce the court assigns responsibility for the debt to just one party. Nevertheless even though this is a decree from a court of law it is more often than not unobserved and disregarded by creditors, especially if the loan goes delinquent.

You must know that a decree of divorce is not noted on a credit report. If one of the ex spouses is accountable for the money owing and a payment is missed the creditors can make an effort to collect from both parties and they can also report the delinquencies on both parties credit report. If your ex-spouse is responsible for the payments and he or she starts to slack off your credit report can also be affected.

Since you have separate households and you are no longer in receipt of mail or notices at the same address, you may not even be aware that there is a problem with the old debts until it is too late and it is already reported on your credit.

If the responsible person decides to stop paying on the loan completely and file bankruptcy the other spouse can be held responsible for the full balance due with late charges. As for the creditor, the court order is immaterial. The other spouse is their only remaining option to collect on the loan and they will go after that person.

It is unfortunate but at this time the credit system is exceedingly unfair to the parties of a divorce. Often the only way to entirely tie up a divorce is to declare bankruptcy. This is very disastrous if there is one party who strives to be dependable and very much wants to keep a clean credit record.

Falling in to credit problems because of a divorse is just one of the many reasons why it is so crucial that we are able to repair our credit. Any item that shows up on a credit report including a bankruptcy can be disputed if it is alleged to be inaccurate, misleading, incomplete, untimely, ambiguous, biased, unverifiable or unclear. - 31382

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