One often overlooked effect of a divorce in Pasadena is the impact a split can have on your credit score. The typical person’s credit score falls between 600 and 750. If your score is above 700, you’re likely to get the best possible interest rates on any loans or credit card offers. If your score is below 600, you may experience difficulty obtaining credit. There is no automatic penalty for getting divorced, but ending your marriage can hurt your credit score if you're not cautious about how you separate your finances from those of your former spouse.
If you’re the one who is thinking about divorce, you should close all joint credit accounts before you separate from your spouse. This simple preventative measure is the best way to keep your spouse from running up debt that you would later be held responsible for repaying.
In some cases, joint accounts can be turned into individual accounts. This can be helpful because it means you won't need to go through the trouble of establishing credit in your own name after the divorce.
Paying off joint debt is always the best option, even if you need to sell certain marital assets in order to do so. Your joint creditors do not need to abide by the terms of your divorce agreement. So, even if your spouse is assigned responsibility for the debt, creditors can still come after you for payment if he or she fails to repay the debt in a timely fashion.
If you can’t pay off all joint credit cards, ask to put a freeze on the account. This prevents additional charges from being added to the debt and thus limits your legal liability. If you explain to your creditors that you are going through a divorce, they can arrange for you to receive copies of statements for all joint accounts so you can monitor payment activity.
How Can We Help?
Please call our office at (626) 683-8113 or email us at info@PasadenaLawOffice.com if you have questions about the terms of your Pasadena divorce settlement. Our attorneys have extensive experience handling a variety of issues related to the distribution of marital assets and debts.