Credit Rating and Divorce

Divorce will often mean substantial financial change for both husband and wife. Dividing finances and bills can be complicated, especially after a long-term marriage. Both parties will have to create new solutions for their financial futures, often making changes and cuts in several areas. Thought the proceedings and afterwards, these financial changes can create stress for some in terms of their credit rating.

Divorce, in and of itself, does not impact a credit rating, either positively or negatively. However, the division of marital debt and how each party handles that debt during and after the marriage can have long-term effects. In New Jersey, marital debt is equitably distributed at the conclusion of the case. This often means that each spouse will leave the marriage being responsible for about half of the marital debt. In some cases, these debts may be in both spouses’ names. The divorce court may hold that one spouse is solely responsible for a debt, even though both names are associated with the debt. The ruling of the judge in the divorce is not binding on the debt holder. So, for example, a court may order that one spouse is responsible for making the payments on a car note in both spouses’ names. However, this ruling cannot force the company who holds the car note to release the other spouse from liability. If the car note doesn’t get paid, then this failure can and will negatively impact the credit of both spouses, even though they are no longer married.

To avoid this sort of negative credit impact, it may be necessary for you to keep payments current on a debt if your former spouse is falling behind in payments. You may then return to the family court and ask that your former spouse be ordered to reimburse you for the money you paid on his or her behalf. There are other tools available to help with enforcement of these orders, such as contempt of court and an order that the violating spouse pay the other’s attorney fees incurred in having to bring the matter back to court.

We are n helping our clients with issues that come up both before and after the final divorce decree has been entered. Call us today at (732) 529-6937 and we can talk about your case and your future.