Along with child custody issues, divorcing couples in New Jersey probably dispute the division of their assets more passionately than most other factors. However, an important element in reaching an equitable property distribution is balancing the debt the couples share. Without careful attention to one’s liabilities, one spouse may be at risk of damaging his or her credit score, which may hinder the chances of moving forward independently.
Financial advisors encourage divorcing spouses to obtain copies of their credit scores from all three credit bureaus as early as possible in their divorce proceedings, and to monitor those scores throughout the process. This will keep one alert for any mistakes on the report as well as any new debt one’s spouse may accumulate before the divorce settlement. Ideally, the spouses can work together to separate the debts, perhaps even refinancing certain loans to remove one spouse’s name. If negotiation is not possible, it may be necessary to sell the home or cars to eliminate the debt.
Separating their accounts is the first step spouses can take toward financial independence. Closing joint accounts or clearing one spouse’s name from the account will help the spouses to begin to build their own credit ratings and their own financial histories apart from the marriage. Bank accounts, credit cards and loans should be closed or divided as soon as possible.
Although property distribution may be foremost in a divorcing couple’s minds, the careful separation of debts may also play an important role in ensuring one’s credit rating is not destroyed because of the divorce. To safeguard that one does not walk away from the settlement with more than his or her fair share of debt, the assistance of a New Jersey divorce attorney could prove invaluable. With an experienced lawyer to advocate for one’s best interests, all debts and assets will be discovered and examined so that one has every chance of stepping in a positive direction after the divorce.
Source: credit.com, “What Happens To Your Credit When You Get Divorced?“, Lucy Lazarony, Accessed on July 12, 2017