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High asset divorce in Pennsylvania means dividing debt, too

| Jul 5, 2016 | High Asset Divorce |

While a person’s credit score is not affected simply because he or she signs a divorce agreement, the changes in that agreement may open one up to potentially negative hits on a credit report. When people in Pennsylvania face high asset divorce, they may also share high debts. These debts will also be divided in a divorce settlement.

Absent an agreement between the parties, the court will decide which spouse is responsible to each creditor. Nevertheless, the original agreement between the creditor and the debtor remains in place. For example, if the names of both spouses are on a credit card account, both are still liable for the debt even if the court decided that one spouse is responsible for the monthly payment. If that spouse fails to make the payment, both risk damage to their credit reports.

A divorced person who keeps an emergency fund is better able to sustain joint accounts should the other person fail to make timely payments. Still, those whose former partners do not hold up their end of the agreement may find themselves back in court to sue for the back payments. This is not a quick procedure, and waiting to pay the monthly bill until restitution has been made may result in a drop in one’s credit score.

Even if one is not dealing with a high asset divorce, debt division may be a large part of a dissolution agreement. In Pennsylvania, people facing divorce may discuss these issues with their attorney. If a spouse is not paying his or her court ordered debts, one may consult an experienced family law attorney who will work to make sure their rights are protected.

Source: yahoo.com, “Does Getting a Divorce Hurt Your Credit?“, Brooke Niemeyer, July 2, 2016

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