Credit Report Issues During Separation and Divorce: Part III
By: Cynthia Robbins
Do you know how to address your situation when you are tempted to hurt your former spouse’s credit score and damage their credit report?
At times, decisions can be made which may negatively hurt your former spouse’s credit report or negatively impact their score. However, it’s very important to keep these factors under consideration:
- Do you want to receive spousal support?
- Do you want to receive child support?
- Do you want your spouse to help contribute to your children’s expenses if they go to college?
- Do you expect your spouse to begin working or increase their hours so your spousal and child support can ultimately be reduced?
- Do you want your children to be able to visit your former spouse in a safe environment?
Spousal and Child Support Issues
Many other considerations may come into play, but in most cases, even though you are separating or divorcing, your former spouse’s financial health can significantly impact your own financial well-being and even the financial well-being of your children.
It is now standard practice for most employers to not only run criminal background checks, but also credit reports. It’s usually in your best interest to have your former spouse have the best scores, too, so he or she can secure the best employment possible and not lose employment advancement opportunities due to low FICO scores.
If your former spouse’s income increases, in most cases, this will positively benefit you and your children as well. If spousal support and/or child support orders are in place, it would be extremely difficult for your former spouse to request the court to lower these amounts of support in the future through a modification proceeding. In some cases, you may even be able to ask for increases in spousal or child support when your former spouse’s financial situation improves.
On the flip side, if you are responsible for paying spousal and/or child support, you may be able to ask the court to reduce these amounts in the future as your former spouse’s financial health improves. If you have been the primary income provider and your spouse has not worked recently, consider genuinely helping them if possible to secure positive and meaningful employment opportunities. This may help them, and you, in multiple ways to be able to move forward emotionally and financially.
If you, however, sabotage your former spouse’s employment opportunities, this may well hurt you and your children more than you realize for years to come.
Children’s College Expenses
In an ideal world, most parents want the best possible educational options for their children. In some cases, this means that both parents will need to help their children secure student loans. Parents with a poor financial history may be unable to do this, which can be devastating and embarrassing for the entire family.
For example, suppose your former spouse is under extreme pressure to pay the maximum amount of support to you and your children and defaults on their student loans. In that case, this can ultimately negatively impact their credit history for up to 7 years. If your former spouse has poor FICO scores and does not pay off their student loans, this may also impact their ability to obtain student loans for your children. If your spouse declares bankruptcy, this too could impact their ability to help your children obtain the funding they will need for college expenses.
One recommendation each parent could pursue in settlement proceedings would be to consider opening 529 accounts for their children and regularly contribute to these accounts. This may provide tax advantages and help both parents now while jointly preparing for their children’s futures.
Helping Your Spouse with Housing Issues
Negotiating housing options can be a brutal and painful reality for individuals who are divorcing. If spouses were combining incomes to pay for housing and living expenses, in almost all cases, the standards of living for both spouses might be significantly impacted. While it may be tempting to simply fight for the best possible housing options for you alone and your children, if such determinations severely impact your former spouse’s ability to secure safe and affordable housing alternatives, this may be an unwise move for multiple reasons. Creating safety and security for both spouses and children during these times of uncertainty is crucial to helping everyone ultimately move forward and heal. Doing everything possible to help both parents have safe and encouraging homes that the children can spend time, visit, and live in is so important, even if making such decisions reduces your own standard of living.
Seek advice from your attorney and advocate for the financial future and well-being of all family members – fighting to hurt the former spouse’s financial options may be tempting but can often backfire and have damaging results that may ultimately negatively affect each family member in the future. Actively considering the future now and doing everything possible to help both you and your spouse improve financially can have an incredibly positive impact on both and your children for many years to come.
To learn more about divorce, visit our Divorce Law page.
Related: Divorce Law
Cynthia Robbins is an Associate Attorney at WhitbeckBennett. She has extensive in-house experience working for both for-profit corporations and non-profit organizations. Ms. Robbins has worked in the United States, England, Singapore, and India. She especially enjoys legal technology and has gained over 20 years of experience working on various litigation support teams and completing discovery work through both traditional review methods and eDiscovery tools. To Learn more about Cynthia Robbins, click here.