A divorce may have a significant impact on your financial future as you may lose assets or be required to pay alimony. If you share children with your former partner, a South Carolina judge may order you to make child support payments as well. The financial repercussions of ending a marriage may ultimately lead to a reduction in your credit score.
Filing for divorce won’t automatically hurt your credit
On its own, filing for divorce has no impact on your credit score. Lenders will still evaluate requests for financing based on your monthly income, credit utilization rate and other objective factors. Your employment status may also play a role in whether or not a lender is willing to work with you. Alimony payments are not considered income, so they may not be considered when evaluating a car loan, mortgage or credit card application.
Debts may linger after a divorce
If you accumulated credit card, auto loan or other types of debts with your spouse, you may be liable for those debts after the divorce is final. Even if your spouse is responsible for making payments per the divorce decree, a lender isn’t bound by those terms. Instead, you could be subject to foreclosure, repossession or a lawsuit if payments aren’t made in a timely manner or at all.
It may be possible to obtain alimony, child support and other types of financial assistance in a divorce settlement. Bank statements, tax returns and other documents may make it easier to prove that you need such assistance. Furthermore, these records may be used to assert that your spouse should pay credit card or other joint debts.