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Protecting a credit score following divorce

On Behalf of | Dec 27, 2018 | Divorce

Even couples in Virginia with the best of intentions find that the changes life brings often leave them different people, sometimes no longer compatible with the person they married. For many families, the best option for a happier, more fulfilling life is to seek a divorce. Even those committed to an amicable split, however, can experience emotional and financial hardship, leaving the creation of a final settlement a relief. However, even once their agreement is finalized, additional follow-up may be necessary; failure to do so can have a significant impact on a person’s credit score, for example.

A recent case in another state illustrates this point. The divorce settlement dictated that the wife would retain the family home. Because the mortgage was in both of their names, the husband would transfer his interest in the home to his wife once she had the mortgage refinanced in her name; the woman had nine months to do so. These steps would remove the man from being responsible for the home.

However, the woman failed to do so in the time specified. The man was reportedly unaware of the impact this would have on him until he attempted to purchase a new home and discovered that his continued financial interest in the wife’s home was negatively impacting his credit score. He took legal action to enforce their original settlement. The court ruled in his favor, arguing that a credit score has “economic significance” in the United States.

The decisions that are made as part of a divorce settlement can have a long-term impact on a person’s financial stability. Not only does the division of assets need specific consideration, but so does ensuring that both sides follow through on their responsibilities.  Failure to do so could result in additional legal measures in Virginia and across the country.

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Attorney Harvey S Lutins