Not only can a divorce have a devastating effect on a person’s emotional well-being, it can also be detrimental for one’s pocketbook and credit score. In fact, a common catalyst for someone to file bankruptcy is divorce. If you are going through a divorce, there are certain steps you can take to ensure that your finances are in order.
Something that many people do not think of doing is checking their credit report. Your credit report will determine if you will be able to obtain a loan for a new home, something that you may need after you separate from your spouse. There very well could be errors on your report that may drag your score down.
It is also important to shut down any bank or credit card accounts that you and your former spouse have together. If you don’t, you may end up paying for the things your ex purchases. You should open up a bank account and credit card accounts, if necessary, in your own name.
If you do have debt that you find insurmountable, you may need to file for bankruptcy. This should be your last resort though, as a bankruptcy can negatively affect your credit score and stay on your report for up to 10 years. Bankruptcy can give you a fresh start, however, and it is important that you take advantage of it by working toward building up your credit again. This can be done by opening up credit card accounts and paying the balance off each month on time.
When you take these simple measures, you can work to ensure that you are financially stable after your divorce.
Source: AL.com, “Don’t let divorce hurt your credit,” Matt Becker, July 17, 2013