High-asset couples and those of more modest means often have different types of money issues to resolve in a divorce.
No matter how sound your financial status seems, however, it makes sense to take a good, hard look at what the end of your marriage is likely to do to your finances.
In particular, how will it impact your ability to get credit? In an economy that is based on access to consumer credit, this is important for your future – even if you consider yourself as someone with substantial assets.
Let’s start with your house. If you and your ex-spouse bought it together, one of you may want to buy out the other’s interest. This is because both of you probably co-signed on the mortgage loan.
Before the real estate crisis and the Great Recession, it usually wasn’t all that difficult to make such a transaction happen. Indeed, it usually wasn’t that hard to get credit right away for the spouse who didn’t get the house to buy another one.
That was then, but this is now. Today, with the struggling real estate market, it may be difficult to sell the old house. The house may be underwater, with a mortgage loan that far exceeds what the house can be sold for.
To complicate things further, the spouse who didn’t get the house may not be able to get credit to buy another one until the matter of the mortgage on the previous house is resolved.
In short, even if your home is high-end, the credit issues involved in moving forward financially after a divorce can be considerable.
Source: “How divorce affects your credit,” MSN Money, 8-9-12
Our firm handles situations similar to those discussed in this post.
