Many people who are going through a divorce often think about what the property division process will be like. If you’re going through this, you may become focused on what assets you get to keep and what debts you’ll have to pay. But, there’s a potential long-term issue that you need to think about – the effect on your credit report and history.
When you go through property division, there are two primary ways that debts can be handled. They can either be assigned to one party or they can be paid off. Some people prefer to liquidate assets to pay off debts, but that’s not always possible.
Debt assignments matter considerably
It’s critical to remember that creditors aren’t part of the divorce process. This means that they aren’t bound by the terms of the divorce. They’re allowed to continue to hold both parties accountable for the debts. If the debt isn’t paid, they can put it on each person’s credit report, regardless of who was supposed to pay for it. This means that your ex failing to pay for a debt they’re supposed to could come back to harm your credit report.
Considering every aspect of the divorce process is critical, particularly when it comes to the property division aspect. Taking the time to evaluate how various options may impact you now and in the future may help you to determine how to move forward with this. Working with someone who’s familiar with your case can be beneficial.
