Going through a marital split-up in New Jersey is never easy no matter how many or few assets a couple has. However, the more assets a couple has -- and the more complex they are -- the greater their chances of running into hurdles during the property division process. Making matters even more complicated is that certain events during a divorce proceeding can cause one's credit score to drop, which can be scary for those who are not prepared for it.
The first reason a spouse's credit score may go down during divorce is that one of the spouses can still access the other spouse's financial accounts. This is why splitting joint accounts as quickly as possible during a divorce proceeding is critical. Unfortunately, if one party racks up extra charges on a joint account, the spouse who was not responsible for accumulating debt will still assume responsibility for paying it off.
Another reason for a spouse's credit score to go down following divorce is that he or she has to refinance the marital home so that it is in his or her name only. This process can affect the credit score since a credit inquiry has to be completed. On top of that, the spouse may end up with more debt on paper as a result of the refinance, which impacts the credit score.
The financial aspect of divorce can naturally be confusing and overwhelming. However, an attorney can provide the information and guidance necessary to make educated decisions regarding areas such as asset division in New Jersey. The right divorce decisions today can prevent a great deal of financial loss and heartache in the years to come.
Source: credit.com, "10 Ways Divorce can Affect your Credit", Josh Smith, Dec. 15, 2017