There are many ways a Louisville divorce can affect your credit. What do you need to be aware of as you work through the process of a divorce? Those who are considering getting divorced might have heard that divorces can impact your credit score. There are several things that might occur during a separation which could have a negative impact on credit scores.
A primary example of this is the family home. Many parties wish to keep possession of the family home or even agree to allow the other party to remain in the house. It is important to understand the Judge in your case has the authority to award the house to one of the parties. However, this has no impact on the responsibilities of each party on an existing mortgage. Many people are surprised when their former spouse misses payments on the mortgage resulting in a negative impact on their own credit. When people apply for refinancing, they will undergo hard credit checks, which can cause drops in their credit scores. It is important to refinance existing loans to remove this risk.
Another way in which a Louisville divorce can affect your credit is the division of debts and assets. Parties working through a divorce may also suffer credit score drops if they take on more of the debt in the property division. To help prevent surprises, divorcing spouses should run credit reports so that they can understand all of the accounts that might have their names on them. Our proven divorce and family law attorneys will work with you to develop strategies to protect your interests.
Going from two incomes to one is another way a Louisville divorce can affect your credit standing. Credit card companies may decrease limits because of the decreased income, which might mean lead to a higher debt-to-balance ratio. Credit can also be negatively impacted when one party fails to make payments on time. Therefore, spouses should be aware of the importance of closing joint accounts.
It is possible for people to take steps to minimize the negative impacts that their divorces might otherwise have on their credit scores. The attorneys at Dodd & Dodd will work closely with your financial adviser and other professionals to help protect our clients’ financial interests. We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.