Do you have Bad Credit due to a Divorce?
Divorce proceedings will not affect your credit report or scores directly, but there are ways that a divorce could take affect on your creditworthiness. Although if you start to miss payments on your loans or credit accounts because you are consumed by the divorce in some cases for example your credit could drop.
If your divorce decree (final court agreement) notes that your former spouse agrees to taking on the debt from some of your joint accounts, you will still however be liable for the debt. If your former partner fails to make the payments the creditor and or lender can come to you to seek payment.
How do I protect my credit after Divorce?
Whatever it takes, make BANKRUPTCY your last move if you gone through all other resources because keep in mind BANKRUPTCY is not an easy way out.
Please see below some tips to protect your credit after Divorce:
- Close or separate joint accounts: Analyse all your debts and decide who should be responsible for each
- Take stock of your residential or investment properties: Refinance the home to get one name off the property or sell the home and divide the shares.
- Don’t stop paying bills: Until the accounts are separated neither of the two of you can afford to miss their turn in paying bills, especially during the divorce negotiations at least the minimum payment of each loan should be paid on the due date as this can hit your credit file for a maximum of 7 years.
Who is responsible for loans after divorce?
Generally, both spouses but, the family court will try and divide assets and debts for the couple the court will then also indicate who will be responsible for paying which bills while dividing money and property.
In some cases, one spouse may be responsible for repaying certain loans including some joint loans which were applied by both partners such as a car or home loan. Although in saying this, just because they’re supposed to take care of the debt they may not follow through the agreement and miss making the payments, this will then cause issues on the other spouses credit file.
To find out more, speak with our friendly consultants on 1300 656 600 or apply online and one of our brokers will contact you.