With any kind of action there are often consequences. While divorce may have some obvious impacts on one’s life, there are also some that may not immediately occur to many California residents. Depending on how each party conducts his or her financial affairs, the consequences may not even become immediately apparent until after the divorce is completed.
During the divorce process, it is common for agreements to be made regarding the division and repayment of debts. However, it must be borne in mind that one’s divorce papers do not overturn the original credit or loan contracts. This means that there is potential for problems to develop further down the line.
When there is shared debt, both parties are likely to be held liable by the creditor, even if the agreement reached during divorce is that one party should shoulder the burden of the payments alone. This could be problematic for the other spouse if the repayment schedule is not adhered to, placing the credit rating of both parties at risk. In addition, if one is ordered to make payments to one’s former spouse for child support and these payments are not maintained, this may also result in one’s credit rating being adversely affected.
Keeping creditors updated on one’s financial situation is important. California residents may be placed in the unfortunate position of having to make a choice between being in the right as far as the divorce agreement is concerned or having to make payments that should either be jointly or wholly made by their former spouses. Getting the appropriate advice and guidance can assist one when divorce agreements are not upheld.
Source: foxbusiness.com, “Does Getting a Divorce Hurt Your Credit?“, Brooke Niemeyer, July 5, 2016