The end of a marriage marks a significant life event for both Florida spouses. Often, individuals are eager to move beyond a broken marriage and toward new horizons. Unfortunately, there are lingering effects that can continue to impact one's life long after the ink has dried on the divorce papers. It turns out that divorce does not sever many of the financial ties that bind two people together, especially when to comes to matters of credit.
When two people share lines of credit, those accounts will be listed as joint liabilities, even after the divorce has been made final. In order to remove one party from that account, both parties have to agree in writing. In many cases, the creditor will still refuse to release one spouse and allow the other to assume full responsibility for the account. In those cases, the only way to break free is to pay off the balance and close the account.
Another way that divorce can impact credit is through the division of debt that takes place as part of the property division negotiations. Once the dust has settled, both spouses will find themselves responsible for a share of the family's debt. In some cases, that debt will far exceed what creditors consider to be a healthy debt-to-income ratio. If late payments occur, an individual's credit score could plummet.
For those in Florida who are preparing to divorce and are wondering how the change could affect their credit standing, the news is not all bad. Even if one's credit score takes a tumble during or immediately after the divorce, there are plenty of things that can be done to offset that damage and rebuild a strong score. In fact, many people embrace the chance to become more involved in their own personal financial management, and they view credit repair as one aspect of preparing for a brighter tomorrow.
Source: U.S. News & World Report, "5 Ways Divorce Affects Your Credit", Paul Sisolak, April 14, 2016