Protecting Your Credit Score and Managing Debt in Divorce
Many Americans can’t go too long without thinking of their credit score. Good credit is needed to take out loans, mortgage a house, or even rent an apartment. Unfortunately, many struggle to manage their debt during and after divorce, and this can negatively affect their score. It’s easy to miss a credit card payment in the midst of handling your divorce finances. It is also easy to disagree over who should pay which debts.
Many spouses turn to bankruptcy after the divorce because of this. Managing your debt in divorce is challenging, but here are a few tips to help you protect your credit score during your divorce.
First things first, run your credit report. Before you start discussing how to divide your assets and split the monthly bills, carefully go over your credit report with your spouse. It is important you are both aware of what accounts you need to be liable for, what accounts are paid off but still open, and what accounts may be in default.
Having your credit report in front of you can help guide your debt division.
Figure out what you can do to improve your score now if needed to prepare for new financial ventures after the divorce. Your score will influence the interest rates you may be given if you opt to refinance an account so you can move it into one spouse’s name. You will also want to make sure your credit score is good before renting or buying a new home after you separate.
Consider working with an experienced Massachusetts divorce mediator if you and your spouse are concerned about debt in your divorce. Mismanaging debt in divorce can be easy and could lead to bankruptcy. Alimony and child support payments can easily become overwhelming, making paying off debt harder. Domestic support obligations like child support and alimony are not dischargeable debts in bankruptcy. Filing bankruptcy on consumer credit is an all too common solution to this problem. Carefully managing your debt in your divorce can ensure both you and your spouse can handle the new expenses you may face and protect both your credit scores, securing your financial future.
Do you have questions about debt in divorce? If so, Mediation Advantage Services can help.
Polly A. Tatum has the skills and experience needed to help you and your spouse wisely divide your debt through guided and non-adversarial mediation. Based in historic Worcester with a satellite office in Northboro, MA, our firm serves all cities and towns throughout Massachusetts and Worcester County including, Auburn, Paxton, Leicester, Sutton, Grafton, Shrewsbury, Westboro, Northboro, Southboro, Holden, Sterling, Princeton, Worcester, Charlton, Millbury, Dudley, Spencer, Brookfield, Sudbury, Natick, Framingham, Hopkinton, Milford, Blackstone, Leominster, Fitchburg, Acton, Jefferson, Barre, Oakham, Cambridge, Newton, Marlboro, Lancaster, Bolton, and Hudson. Call our office at (508) 795-1557, fill out our online form, or email us at [email protected] today to schedule your Complimentary Mediation Success Planning Session. You can also sign up for oureNewsletter or download our free e-book for more information regarding divorce in Massachusetts.