Divorcing spouses in Alabama may find that the legal proceedings come with financial concerns. Child support and asset division are not the only fiscal matters that affect someone’s finances. A personal credit score may suffer when someone divorces. The credit bureaus do not give anyone “bad marks” for divorce, but expenses and financial decisions before, during and after a divorce could harm a credit report.
Dealing with the credit fallout
Divorce proceedings not only address assets but also liabilities and obligations. A court decision could leave one spouse with the obligation to pay joint debt. Unfortunately, if that spouse misses payments or defaults, the actions would impact the other spouse. The debt remains in both names and connects to both individual credit reports. Closing joint accounts is helpful, and doing so sooner rather than later could be beneficial.
Performing an audit of bank, credit and tax-related accounts might make the process less complicated as well. Knowing what debts exist and in whose name may add some coherency to any financial plans.
A spouse could try to hide assets and obligations from their partner. Maybe one spouse took out a loan in the other spouse’s name without his or her consent. Discovering such things before entering divorce proceedings may put someone on a better footing to deal with court situations.
Post-divorce matters of concern
No matter what positive steps a spouse takes, a post-divorce credit score could look bleak. Devising a plan of action to address debt and improve the score might become a priority. Working out a new budget and sticking to a specific payment plan could deliver positive results.
A client may ask their attorney about debt responsibilities before entering into negotiations or court proceedings. An attorney may also help their client with other financial matters such as spousal maintenance and child support.