How To Minimize The Effects Of Divorce On Your Credit Score
Posted on: 21 May 2015
There are many people who believe that getting divorced from their significant other will automatically eliminate the financial woes that occurred when the marital union was still legally effective. However, they couldn't be farther from the truth. Indeed, financial institutions, most specifically credit card firms, aren't interested in knowing that your marriage is ending since all they want is that someone settles the balances that have been contracted jointly. And until this is done, they will damage your credit score, even if you've officially parted ways with your ex years ago. This article explains how you can minimize the consequences of a divorce on your credit score.
Take action before the marital union is legally ended
In general, dealing with joint debt is easier when the marriage is still effective. This is mainly because you still have the ability to switch the features of the accounts and separate yours from your spouse. Once this is done, you need to do whatever you can to pay for the outstanding balances and make sure that your creditors issue a written statement explaining that you have repaid your debt.
In case you're limited in your finances (maybe because you've started paying for the legal fees associated with the divorce procedure), make sure you contact your financial institution so that it may suspend any activity on your account. This will prevent additional debt from being generated.
Request assistance from a lawyer with mediation skills
Depending on whether you're able to make satisfactory payments towards your overdue balance, you may or may not be forced to hire an attorney with acute mediation skills. This scenario typically occurs when the debt has been outstanding for a long time period. The level of experience of the lawyer you choose will determine their ability to negotiate an agreement with your credit card firm.
It's important to keep in mind that during the mediation process, and even after the negotiations are successful, your outstanding debt will continue to generate interests and late fees. All of this will eventually have a negative impact on your credit score.
When dealing with financial issues in the middle of a divorce, it's generally recommended to settle as much as possible, since this will prevent your credit score from being damaged any further. Consider hiring a lawyer like Susan M Caplin if money is a problem for you, and if you need more time to take care of your unpaid bills.
Share