Bohm Wildish – Divorce and Taxes: Tax season is here– everyone’s favorite time of year. (Not.) Most people are currently thinking about their finances, their taxes, their credit score, etc. More than 75% of California marriages end in divorce, so many of our clients from Orange County and Los Angeles are especially worried about finances this time of year if they’ve been recently divorced. RoadFish recently released a few observations about how a divorce can affect one’s credit, and we thought we would share them with you.
Divorce won’t show up on either party’s credit, but there are financial and/or credit implications you should be aware of. There are many types of debts that couples can both be responsible for: car loan, mortgage, credit card, etc. All of this debt is linked unless the appropriate steps are taken to split the union. For example, refinancing a vehicle is one way to get an ex’s name off the car loan. Mortgages are trickier. If one person continues to live in the home, both parties are still usually held responsible for the mortgage payments.
Even though figure out who will pay for what doesn’t seem like a priority in the midst of a divorce, make it one. There will seem to be much bigger fish to fry, but add this to your list of priorities. You don’t want to be financially responsible yet have your credit plummet because your ex forget to make a few payments with your name still on the loan.
Consult an experienced attorney or financial adviser before making these decisions. But take the necessary steps before you’re in financial trouble.
To Learn More on Divorce and Taxes Read: Tax Questions During and After Divorce