The effects of divorce reverberate throughout your entire life. From the repercussions on your mental and physical health to the impact on your children and the consequences on your finances, divorce can cause you a lot of stress and anxiety. One of the most significant worries many divorcing couples have is how debt and divorce play a role in your life moving forward. Debt division and divorce is a serious topic that you should discuss with a family law attorney from Brian D. Perskin & Associates P.C. as soon as possible. This article will outline many of the considerations and consequences of debt in the context of a divorce.
Identify Shared Debt
One of the first things you should do before filing for divorce is to identify the shared debt you have as a couple. You must differentiate between shared and individual debt to move forward with the division of assets. Personal debt will remain with you, whereas you will split shared debt based on your divorce agreement. You should consider moving the shared debt to separate accounts when you divide it and then close any joint accounts to prevent your soon-to-be former spouse from continuing to use them.
Do you have a mortgage? If so, the person who retains the marital home will be responsible for paying the mortgage in a New York divorce. Even though you will remain in the home, your spouse is still obligated to pay the debt to the creditor. Your divorce decree will not alter this commitment. Either agree with your former spouse on the structure of mortgage payments or risk defaulting on the loan.
Will Divorce Impact My Credit Score?
Many divorcing couples ask about the effects of divorce on their credit scores. Some people fear that finalizing a divorce will negatively impact their credit score. Simply, it will not have an impact on your credit score. When you apply for a loan, they do not ask about your marital status or divorce history.
There are indirect causes of a divorce that could impact your credit score. For example, missing credit card payments or utility bill payments will affect your credit score because you don’t have enough income anymore. Another example is if you still have accounts open with your former spouse’s name on them. If he or she continues to accrue debt or fails to pay those bills, it will impact your credit score.
How to Protect Your Finances After Divorce
There are plenty of ways you can protect your finances after divorce, including:
- Change your lifestyle to reflect your reduction of income
- Create a budget and stick to it
- Pay for your primary expenses using your income and not spousal support
- Remove your spouse as an authorized user from credit cards
- Pay down joint debt
- Ensure your spouse’s debt is in their name
Worried About Debt and Divorce? Call an Attorney Today
Are you preparing to file for divorce in New York and are worrying about how debt will affect your financial situation moving forward? It is in your best interest to speak to a divorce attorney. The skilled attorneys at Brian D. Perskin & Associates P.C. will help you coordinate your finances alongside divorce proceedings to ensure you emerge financially solvent. Call us today at 877-826-7257 to schedule a free confidential consultation. We are here to guide you through the legal process and answer all your questions about debt and divorce.