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Impact of Divorce on Your Credit

Financial matters typically form a considerable part of a New Jersey divorce case. In other words, a Garden State marriage dissolution case oftentimes involves a good number of issues associated with assets and debts. The reality is that New Jersey divorce can have a significant impact on your credit. When it comes to the connection between divorce and credit, a divorce can negative impact your credit in a number of different ways that include:

  • Decreased credit limits
  • Inability to get credit
  • Less income
  • Need to refinance
  • Deliberate financial waste and financial damage
  • Inability to maintain outstanding debt obligations
Decreased Credit Limits

One of the potential negative outgrowths associated with divorce and credit involves credit limits. Specifically, one of the more commonplace consequences divorce can have on your credit is the lowering of your credit limits. For example, a divorce very well may result in a decrease in your credit card spending limit.

This type of decrease can occur for a number of reasons. First, you previously may have had joint accounts with your spouse or former spouse. When you are left to seek credit on your own, you no longer have the added benefit of a solid credit history that your spouse established.

Inability to Get Credit

In addition to facing a reduction in credit limits in a divorce and credit situation, you may also find yourself in a position in which you are not able to get credit as all. This can happen because oftentimes credit availability during a marriage is the result of credit history of one spouse over that of another. If you have been the party to a divorce that has shared in your spouse’s credit history when financing of any type during the course of the marriage, you might exit that relationship without a well-established credit history of your own.

Less Income

In addition to not being able to access credit of your own following a divorce, another issue associated with divorce and credit may focus on your employment prospects. You may experience what proves to be a significant reduction in your income as a result of your involvement in divorce proceedings.

You may not have worked full time during your marriage, your spouse being the proverbial primary breadwinner. While you may receive spousal support or alimony as a result of a divorce, the stark reality is that these types of payments may not be sufficient to permit you to enjoy the standard of living that existed while you were married.

Need to Refinance

Another impact of a divorce of a person’s credit is found in the possible need to refinance. A person may find his or herself facing limited options when it comes to making purchases over time or obtaining financing. If a person has the marital residence set aside to him or her, that individual might need to take steps to attempt to lower monthly home mortgage payments. Refinancing oftentimes is a solid course to take to aid in improving an overall financial status following the end of a marriage.

Deliberate Financial Waste or Financial Damage

When it comes to credit issues associated with or arising from a divorce, a person also needs to pay attention to the possibility that the other spouse engages in conduct that results in financial waste or can cause financial damage. This includes actions by the other party that can cause significant damage to that person’s credit score but also your own if this occurs while a divorce is pending and before assets and debts have fully been set apart by the court.

Inability to Maintain Outstanding Debt Obligations

One of the most challenging issues that can arise out of the confluence between divorce and credit is a post-marriage inability to properly address outstanding debt obligations. In other simpler words, a divorce sometimes results in a person not being able to pay all of their bills.

The bottom line is that a divorce oftentimes does alter the financial position or one or both spouses, sometimes significantly so. This reality is a reminder that when contemplating divorce, or when served with divorce papers, a close consideration of financial realities is a must. Moreover, the need for comprehensive and strict budgeting is nearly always a necessity. If you need advice concerning a divorce call us today.


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Peter has integrity, and values his relationships with his clients beyond his financial relationship with them. For me to say this about any lawyer is really saying something. He is compassionate, straightforward and knowledgeable. I would easily recommend him to anybody. Lewie W.
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Peter Van Aulen handled my case with great diligence and integrity. He is also a compassionate individual who realizes what a difficult time divorce can be emotionally. Peter works hard and doesn't take any shortcuts in preparing for a case… I highly recommend Mr. Van Aulen and his staff. Chuck Solomon
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Peter is an exceptionally great attorney. He handled my child custody case and was able to ease any of my concerns with honest answers. He always took the time to explain the pros/cons and was always available to answer any questions that I had… I would highly recommend this attorney to anyone who is looking for one. Jessica Cruz
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Peter Van Aulen is a very compassionate, honest and straightforward person. He was there for me at my lowest point with a genuine concern not only for my situation, but for me and my child's well being above all… He is fair and he is strong and when push comes to shove he is there for you. Cathy Dodge
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Our cousin used Peter's law office to help with a sticky custody situation. He was extremely responsive, very nice and most importantly did an awesome job with the court! He is awesome. Lawrence Polsky
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