Have you ever wondered why so many people face financial hardship after divorce? According to the Federal Reserve, nearly half of divorced individuals experience a significant drop in their credit score within a year of separation. This issue isn’t just about dividing assets; it’s about protecting financial stability long after the papers are signed.

At Daniel Ogbeide Law, we understand that divorce is not just an emotional process—it’s a financial one. As one of the leading divorce law firms in Houston, we help our clients protect both their rights and their financial well-being. In this article, we’ll cover how divorce impacts credit, why joint debts matter, and the steps we can take to protect or rebuild credit during and after the process.

Joint Debt Doesn’t Disappear With Divorce

One of the most common misconceptions is that divorce automatically separates joint debts. Unfortunately, lenders don’t recognize divorce decrees. If both spouses signed for a credit card, loan, or mortgage, both remain responsible for payments—even if one spouse was assigned the debt in the divorce agreement.

• Missed payments can drag both parties’ credit scores down.
• Debt collection efforts may target either spouse if payments stop.
• Late fees and penalties accumulate quickly, worsening credit damage.

How Credit Reports Are Impacted

Credit reports reflect payment history, balances, and new credit applications. Divorce can impact all of these:

• Reduced income may lead to higher credit utilization.
• Disputes over payments can result in missed or late payments.
• Court costs and legal fees may strain budgets, increasing debt.

Steps to Protect and Rebuild Credit

There are proactive steps we can take:

• Close joint accounts or refinance into individual names.
• Monitor credit reports regularly for errors or unauthorized activity.
• Communicate with creditors to negotiate modified payment terms.
• Set up automatic payments to avoid missed deadlines.
• Build new credit with secured cards or small personal loans.

Protect Your Financial Future Starting Today

Are you concerned about how divorce may affect your financial stability? The decisions made during this time can have long-term consequences. That’s why working with one of the best high-asset divorce lawyers in Houston can make a difference.

At Daniel Ogbeide Law, we provide experienced legal guidance to help protect your financial interests during contested or high-asset divorces. Contact us today to schedule a consultation and let us help you secure your financial future.