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How a person's credit might be affected by divorce

Divorce may affect the credit of some people in Arizona for a number of different reasons. For example, if one spouse keeps the home, that person may need to refinance it. This could leave the person deeper in debt.

Some problems with credit might happen if one spouse is dishonest or uncooperative. For example, a person might not report all debt, and some of that debt could be under the other spouse's name without that spouse knowing it. Another situation that could arise is the failure of one person paying a portion of divided debt. If spouses are unable to work together, some bills may simply go unpaid. If the divorce takes a turn for the worse, one spouse might actively try to hurt the other one financially. If spouses have joint accounts they do not close, this can happen more easily.

A person's credit may also suffer from downsizing to one income or taking on more debt than the other spouse. One person could accidentally hurt an ex-spouse's credit because of misunderstanding the divorce decree. Even people who do not run into any of these problems could end up with a reduced credit limit if a creditor does a review of the person's financial situation.

Since Arizona is a community property state, even if only one person earned most of the income, most assets acquired after marriage are considered shared property for the purposes of property division. This means one person might get a portion of a retirement account despite not contributing to it. If there are children, the noncustodial parent may be required to pay child support to the custodial parent. If there is a large income disparity between spouses, one person might also be required to pay spousal support. These may all create additional financial pressures and potential credit issues for some people.

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