Your credit score following divorce
But the decree said he was responsible for that bill!
A common misconception among people going through divorce in Mississippi is the responsibility of paying debts following divorce. Here is a classic example: Husband and wife have two cars, both financed through their bank and both of their names are on the loans. During the divorce negotiations, the wife and husband agree to each keep the vehicle they drive and each agrees to pay for their own car. Following the divorce, the wife is very diligent in making timely car payments. Six months after the divorce, she goes to the bank for a loan and is denied because her credit score is too low. Upon checking, she finds that her credit score was lowered because her ex-husband was not making the payments on his car. How can this happen? Didn’t the divorce split the debts? Didn’t her husband agree to pay the debt? Not so fast. She is still financially responsible for the debt because her name is on the loan.
A divorce decree does not change the original contract you and your spouse had with a creditor—the bank in this instance. Despite the divorce decree saying your spouse is responsible for the debt, your credit can be impacted if your ex-spouse does not make the payments on a timely basis. As long as your name is on the loan, the creditor can look to both of you for payment of the debt. You might be able to sue your spouse for the debt, but that does not absolve you of your liability to the original creditor or protect your credit score. So how can you avoid this scenario?
First, you could require your ex to take your name off the loan by refinancing the debt. The problem is some individuals will have trouble qualifying for the debt on their own income. This is the usual case with home mortgages. Second, you can sell the asset to ensure the debt is paid off and then start over following the divorce. Finally, you can hope your ex-spouse is financially responsible and make all payments on time.
Dividing property and debts in a divorce is not a simple process. The divorce decree does not change the original contract you have with the lender. Therefore, you should consult an attorney to ensure you are protected following the divorce. The Kisselburgh Law Firm can assist you in making informed decisions that will protect you during and after your divorce.
