Robert G. Smith, PLLC

Divorce can negatively impact your credit so be careful

Many factors go into determining who is going to walk away with what assets in a divorce. It is imperative that anyone who is ending a marriage understands what is going to impact the settlement they receive. This is especially important in high-asset divorces because the stakes are serious.

Going through a divorce is almost always a stressful situation; however, knowing what to expect and having an idea about your rights and responsibilities might make it a bit easier. You must determine what steps you need to take to protect your future.

When you are thinking about what has to be divided in the divorce, make sure that you consider the debts. Oftentimes, people start out dividing the major assets like the real property. Then, they move to smaller assets. Finally, they use the debts to try to balance things out.

It might behoove you to have some of the assets sold off to pay for the debts. This ensures that they get paid. If one person is assigned specific debts, and they don't pay, the creditor might come after the other party. Since divorce is a civil matter, creditors don't have to abide by the settlement terms when it comes to who is responsible for the account.

You have to think about how your credit might be impacted by the divorce. For one thing, your debt-to-income ratio will drop when the other person's income is removed. Another point is that you might have negative marks if they don't pay the bills. This could damage your ability to live the life you want when the divorce is over, so think carefully about how the debts are handled.

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