Protect Your Post Divorce Credit Rating & Creditworthiness

Dividing Debt and Protecting Credit Rating in Your Morristown NJ Divorce

Serving Clients across Madison, Florham Park, Morristown, Randolph, Rockaway, East Hanover and Morris County

Dividing Debt and Protecting Credit Rating in Your Morristown NJ DivorceAs discussed in “Debt and Divorce”, when it comes to equitable distribution during divorce proceedings, debt must be fairly divided in a similar fashion to assets including complex assetsretirement assetsfamily-owned and private businesses, and more. At Jacobs Berger LLC, our family law attorneys approach each case as an opportunity to help our clients build a financially secure foundation for their family’s future. 

Where it´s intentionally malicious or as a result of divorce stress (i.e., maintaining two households), each party has the potential to damage the credit rating of the other spouse. Issues with joint credit cards and jointly-owned debt can affect your own personal credit rating, long after your divorce has been resolved. Many people are unaware of the fact that even though their divorce agreement states one spouse or the other is responsible for the repayment of certain marital debt, many lending agencies are not bound by court orders (such as mortgage lenders), and are free to pursue either party for repayment of these loans.

Our legal team takes the time to understand your unique financial needs and concerns in order to offer dynamic and personalized solutions as we have done for clients in New Jersey towns including Morristown, Randolph, Madison, Morris Township, Tewksbury, Rockaway, East Hanover and all of Morris County.

Call our office today for a confidential and comprehensive case assessment with one of our qualified debt, divorce and family law attorneys regarding your division of assets including any outstanding debt.

The Economic Significance of Your Divorce Credit Score and Rating

New Jersey courts recognize the importance a credit rating has in our society. In Cameron v. Cameron, as part of the divorce settlement the wife was allowed to retain possession of the marital home; a very common provision found in many settlement agreements. Although the home had an outstanding mortgage in both names, the husband made arrangements to transfer his interest in the home to the wife (when she refinanced loan in her name only) thus removing the husband from responsibility. Although the wife had nine months from the date of the settlement to comply, she didn’t follow through and the husband (for whatever reason) failed to enforce it. The husband only became aware of this error when he sought a loan for his new home, and was unable to get a favorable interest rate. Unfortunately, he was still listed as a co-owner and his credit score reflected this. Had he requested a credit report at any time in the previous two years, he would have noted the active payment history. 

By taking additional legal action, the husband was able to eventually enforce the settlement agreement and execute the sale of the home. The court declared “it is critical to consider the economic significance which credit reports, credit scores, and credit-worthiness presently have in everyday American life.”

A Negative Credit Rating Can Pose Significant Risk to an Individual’s Financial Health

Too important to be ignored, a negative credit rating or score can pose a significantly disastrous risk to one’s financial health, and could destroy future opportunities to obtain a loan, or limit ones’ chances to purchase a house or car, finance a college/secondary education – essentially severely limiting an individual’s potential financial growth for years to come. 

That´s why it is critical while the divorce litigation is pending to monitor any joint accounts and whether bills, family expenses, and other financial obligations are being met. If at all possible, by paying off marital debt during the divorce process, each party protects themselves and their own credit rating from being affected by any future actions (or inactions) of their former spouse.

If you feel that these obligations are not being paid, it is vital to consult your attorney about any additional legal action you may need to take in order to protect yourself and your financial future.

Don´t Risk Your Creditworthiness in a Madison NJ Divorce

A poor credit score can damage someone in numerous ways including, (as stated previously) the ability to obtain a loan, creditworthiness, economic reputation, potential loss of employment opportunities, as well as one possibly incurring additional legal fees required to fix credit problems.

As mentioned in “What Happens to My Credit Rating During Divorce?” it may be advisable to close your joint accounts in writing and by phone, and remove your spouse from the list of authorized users on your accounts to ensure that they don’t run-up a negative balance.

Credit reports can be obtained for free (once yearly) at FreeCreditReport.com and through other similar services, or can be checked at any time for a nominal fee through credit agencies like Experian and Equifax.

Benefits of a Financial Planner in Understanding Your Credit Rating in Morris County 

Our attorneys always recommend that our divorce clients speak with a financial planner of some kind. This helps us better negotiate things like child support and alimony as part of your divorce and understand your financial obligations and options moving forward.

Contact our Morristown Debt and Divorce Attorneys Today

The debt and divorce attorneys of Jacobs Berger, LLC view each divorce and family case as an opportunity to help our clients build a foundation for their family’s future. When it comes to complex financial issues including the division of debt, dividing complex assetsdividing owned businesseshigh net-worth divorce and more, our experienced legal team believes in aggressively pursuing financial security while keeping communication open and amicable during divorce proceedings.

We have used this unique and effective approach to secure positive outcomes for clients across Morris County towns including Madison, Randolph, Morristown, Dover, East Hanover, Florham Park, Denville, Morris Plains, and all of Northern New Jersey.

If you have questions or concerns about the division of debt in your divorce, please contact us online or through our Morristown offices by calling (973) 718-7705 today for a confidential and comprehensive case assessment with one of our qualified and experienced divorce attorneys.

About the Author:

Jamie Berger practices exclusively in the area of family law. She has extensive experience in all aspects of litigation in family and appellate court proceedings. Prior to entering into private practice, Jamie served as a Law Clerk for The Honorable Eugene A. Iadanza, J.S.C. in the Monmouth County Superior Court, Family Part.

Related Posts