One of the many things you may be worried about if you are preparing for divorce is whether or not it will negatively impact your credit score and bank accounts. The reason you may see conflicting information online is that the answer depends on your unique situation. Getting divorced itself will not negatively impact your credit score. However, issues such as marital debts can have an effect. Discuss your case in more detail with a divorce lawyer in San Diego for further information.
How Might a Divorce Affect Credit Score?
Getting a divorce does not directly affect your credit score. Credit Bureaus do not take your marital status into account when determining your credit score. If you do experience a change to your credit score post-divorce, it is an indirect result of a related issue, such as dividing your joint accounts or taking on a share of your spouse’s marital debt.
In California, property division laws require a couple to divide all marital assets and debts down the middle, in a 50/50 split. This means that even if you were not the one who acquired the debt, if it is part of your community property, you will end up with half of that debt in a divorce. Adding marital debt to your finances could negatively impact your credit score.
A divorce could also affect your credit score in the sense that it can cause financial strain that leads to missed credit card and bill payments. Your credit score is calculated in large part based on your level of debt. If you suddenly lose a source of income, you must be careful to keep up with your bills and not go into debt, or else your credit score will pay the price.
How Will a Divorce Impact Joint Accounts?
If you and your spouse shared a joint bank account during your marriage, this is considered a type of community property, meaning both you and your spouse have an equal share of ownership. Unless it is specifically designated as separate property, a joint checking or savings account will be divided in half between the two of you in a divorce case in California. The courts will divide all of the funds in the joint account equally to each party, even if one of you deposited more money into the account.
If one party drains a joint bank account prior to a divorce in an attempt to keep 100 percent of the money, the courts may take action against that party, such as forcing that party to pay a penalty and repay the debt accrued. Once the courts have divided a joint bank account, the couple can choose to close the account or one party can keep it and remove the other party’s name from the account.
It is important to either close a joint account or remove your name from it if you no longer wish to be associated with that account. No matter what your settlement agreement says, if a joint bank account remains open with both of your names on it, you will both take legal responsibility for that account. If your spouse uses a shared credit card to rack up more debt after your divorce, for instance, this could become your debt and negatively impact your credit score.
How Can You Protect Yourself Financially?
You can minimize the negative effects of a divorce on your credit score and bank accounts by properly handling property division. A divorce attorney in San Diego can help you with this task using knowledge and information from years of handling complicated divorce cases. An attorney can help you with divorce negotiations to try to arrange a property and debt division plan that works for both of you. Your attorney can also help you protect your credit during and after a divorce, if at all possible. Contact a lawyer today for more information.