Debt after Divorce: 38% of Divorcees See a 50-Point Drop in Credit Scores
Money is an influential part of any relationship, but the influence doesn’t end when the marriage is over. According to a new study from Debt.com, 40% of divorced Americans incurred at least $5,000 in debt after their divorce. Additionally, 38% of divorcees saw a 50-point decrease in their credit score shortly after the divorce.
For many divorcees, the financial woes started while they were still married: 39% of divorced respondents said debt played a role in their divorce. Moreover, 43% said they are now solely responsible for a joint debt they shared during their marriage.
Financial discussions are a critical component of preventing a divorce. Last year, the Harris Poll found that 88% of couples believed it was important to discuss money before getting married, but only 51% followed through with those discussions. A separate study from eMoney Advisor found that 57% of couples purposefully avoid talking about money for fear of conflict.
Whether you are married, engaged, in a committed relationship, or on the verge of divorce, talk to your partner about your finances. Nearly two-thirds (63%) of marriages in America start with debt, and the bulk of that debt comes from credit cards. Be transparent about your financial struggles, and make a plan together to eliminate debt and boost your savings. The conversation may be uncomfortable, but it could be the gateway to a much happier future for your relationship.