Credit scores are an incredibly important measure of financial well-being. These scores can open up access to loans and lines of credit that help people in Michigan move forward in life. Unfortunately, divorce can cause some people’s credit scores to take a significant hit. This does not always have to be the case, though, and careful attention to certain family law processes can help most people preserve their financial integrity.
It is not the act of filing for divorce that affects credit scores, but rather the choices that some people make during the process. This is especially true when it comes to dividing up debt. A couple’s divorce decree might specify that one person is responsible for repaying debt associated with one joint account, while the other must pay off a different debt. While this might make it clear to both parties who should be paying what, creditors generally do not care about what the divorce decree says and will hold the other person responsible as well. This can cause a person’s credit score to take a significant hit.
If possible, it is usually best to close joint credit cards and other lines of credit. If this is not possible then removing an ex-spouse as an authorized user can prevent them from ringing up additional debts. Those who are worried about an ex seeking revenge through opening up fraudulent accounts can have their credit reports temporarily frozen.
Cooperation is a big component of tackling marital debt and protecting credit scores. Unfortunately, divorce can be an emotionally-fraught process, so working together is not always a reality. Michigan residents who are worried about their future finances after divorce may want to consider speaking with a family law attorney who can provide further clarity on the matter.