How a Divorce Can Change Your CreditPosted on June 24, 2009

Unfortunately the divorce rate has been increasing in the United States. Far too many people go through these painful breakups. To make matters worse, the split is not only causes emotional pain but often times it also causes financial strain.

In some occasions there are people who have been responsible with their credit for years and they end up with major problems during a divorce. One of the leading causes of credit problems is a recent divorce.

Married people are often treated as equally responsible for repaying loans like car payments, credit cards and home mortgages. Throughout a divorce, once person is usually assigned liability for the money owed. Even though this is a court decision, it is often overlooked by creditors—especially when the loan goes delinquent.

A divorce decree does not show up on a credit report. If the ex-spouse, who is accountable for the balance due, misses a payment, the creditors can attempt to collect from the other party. Both parties will also have the delinquency reported on their credit reports. In other words, if your ex is supposed to pay off a loan and fails to do so, you will be held responsible.

An added challenge is that often times households split up and one person is living at another residence. In most cases only the responsible party will receive the notice of behind payments, so the other spouse may not even realize there is a problem until the loan is delinquent and is already showing as a negative item on their credit report.

If the responsible party decides to stop paying on the loan and file bankruptcy, the other spouse can be held liable for the full debt and late charges. The court order doesn’t make any differences to the creditors, they will go after the other spouse to try to collect on the loan.

The credit system is unfair to the parties of a divorce. Often the only way to fully conclude a divorce is to declare bankruptcy. This is very unfortunate if there is one party who strives to be responsible and badly needs to keep a clean credit record.

Divorce and the credit problems it can bring are just one of the many reasons why it is so vital that we are able to repair our credit. Any item that shows up on a credit report including a bankruptcy can be disputed if it is alleged to be inaccurate, misleading, incomplete, untimely, ambiguous, biased, unverifiable or unclear.

If you need any help repairing your credit after a divorce, please contact Trinity Credit Services at 1-888-669-7372.