One of the unfortunate results of an Arkansas divorce can be a hit to one’s credit rating. While an individual’s marital status has no direct bearing on a credit report, divorce can affect credit indirectly. Paying attention to a few key things during the negotiation process can help people avoid credit problems once the divorce has been finalized.

Although the divorce decree may stipulate which party is to pay off which creditors, credit card companies are not bound by the divorce agreement. This means that they could still go after either party for what is owed. Also, if the person who is court ordered to pay fails to do so, it could mean a negative mark on the credit report of both spouses.

Most married couples have joint accounts and many also have shared credit cards. When going through a divorce, it may be a good idea to have one’s name taken off of any account that one is no longer required to pay. Once that occurs, the creditor is notified that the removed party is no longer obligated to make payments. If the other spouse does not pay on the card, negative repercussions will only affect the responsible party.

Real estate is also likely to be jointly owned during a marriage. If only one party is responsible for paying the mortgage but both are on the loan, it would be a good idea to closely monitor the mortgage payments. Although one’s options are few if the other party doesn’t pay, being aware of the issue could help prevent major financial problems down the line. If the party continues not to pay, legal action may be one’s best recourse.

While the act of divorce will not directly affect the credit rating of an Arkansas resident, the actions of a former spouse could cause damage regardless of what the divorce decree states. Being hyper-vigilant can help prevent financial problems down the road. Failure of one party to pay debts down could affect the other, but options do exist for people who find themselves in that situation. Knowing one’s legal rights in advance of these types of scenarios is always the best approach, and can go a long way toward helping people avoid future credit problems related to divorce.

Source: MSN Money, “How divorce affects your credit,” Rob Berger, Aug. 9, 2012