The financial effects of divorce are wide and varied; for example, your divorce:
Is Likely to Affect Your Credit Score
Getting a divorce isn't guaranteed to damage your credit score, but it can happen if you are not careful. Here are some of the ways in which a divorce can damage your credit score:
- Your credit rating may fall if your former partner doesn't pay their share of joint debts.
- Your credit score may fall if you don't get alimony and child support in time and you fall behind in settling your bills.
- Your credit score may fall if your partner racks up new debt just before the divorce is finalized.
- Your credit score may fall if your income reduces after divorce and you can't pay your bills in time.
May See Your Household Expenditures Increase
Maintaining a single household is easier or cheaper than running two households with the same budget. This is the situation you are likely to find yourself in after the divorce, which means your household expenditures are likely to go up. For example, you will have to pay rent for two houses, a rent and a mortgage, or two mortgages. Even other bills, such as utility and food, will be more expensive for two households than for one household.
May Introduce New Debts
It's even possible to acquire debts that you didn't have during your marriage after your divorce. This is possible because it is not just assets that are divided during the marriage; even the debts have to be divided. Therefore, if your partner took some debts without your knowledge, you may find yourself having to pay a share of the debts. As mentioned above, some vindictive spouses also rack up new debts when approaching divorce (in order to "punish" their spouses). In some cases, your debtors may come after you for joint debts if your partner doesn't pay their share of the debts.
May Affect Your Business Negatively
If you have a joint or marital business with your spouse, its value may also be affected during your divorce. A good example of this is when you have to divide the business or if you lose half the management. For example, maybe your spouse was the one who used to manage the business on a day-to-day basis, but now you have to take care of everything on your own.
If you have decided to divorce, hire the right professionals (starting with a divorce lawyer like those at The Law Office of William K. Gernert) to help you with the process. That way you will be able to rein in the financial effects of your divorce.