With foresight and careful planning, a soon-to-be divorced Arizona resident may not experience any significant changes to their credit once the marriage has ended. However, there are some issues that may arise after the divorce is finalized that could jeopardize a person’s credit score and access to loans if they are not mindful of them during the divorce process.
For example, if a person only has individual credit cards and loans — meaning the individual holds these financial devices solely and not with another named party — they will likely not experience much change in their credit after the divorce. Sole accounts and credit cards remain the sole property of the owning individual after a divorce and that individual will remain liable to creditors for the debts they have amassed.
If, however, the individual possessed loans or credit cards with their spouse, those credit accounts need to be addressed before or during the divorce process. If two people divorce but are both still named on a credit card or loan, they are both still liable for their repayment even if one of the individuals agrees to individually handle the payments. Credit card companies and other lenders are not parties to divorce agreements and are not bound to only pursue payments from those individuals who have stated they will make further installments on the debts.
Assets and debts must be handled during a divorce-based property division. The failure of an individual to keep up with credit-based payments after divorce may cause their credit score to suffer. Readers of this family law blog are reminded that the information contained herein is offered as general guidance. It should not be used as legal advice and individuals with particular questions about this and other divorce topics are encouraged to speak with their attorneys.