How Divorce Affects Credit Scores in Canada - Zukerman Law

How Divorce Affects Credit Scores

The end of a marriage can bring with it considerable challenges, many of which are financial in nature. British Columbia residents who have been through a divorce can attest that asset and debt division can be among the most contentious parts of the process. This is particularly true when credit scores are taken into account, as a divorce can influence the scores of both spouses in a variety of ways.

Divorce-related costs can be a burden for many individuals. Particularly if the case is litigated before a divorce court, the costs can mount quickly, leading some people to use credit cards to shore up the difference. In turn, this can lead to an inability to make minimum payments on existing cards, which will negatively influence a credit score. In addition, any shared accounts (mortgages, credit cards, etc.) are the responsibility of both parties: if one party defaults on payments, this can influence the credit scores of both spouses.

If a divorce is particularly contentious, it can lead to one or both spouses acting irrationally and/or vindictively. This can lead to one or both parties accruing considerable debt on joint accounts, then defaulting on payments. Cases have existed where a spouse racks up debt without the knowledge of the other spouse, causing serious financial difficulty down the line.

In order to protect credit scores in a divorce, it can be a valuable first step for British Columbia residents to immediately separate joint accounts, and remove authorization for a spouse on individual accounts. Securing the support of divorce attorneys to help negotiate and draft written settlement agreements that address the costs of a divorce, as well as asset and debt division, can also be helpful. In this way, both spouses may be able to handle the financial cost of a divorce and move forward to reap the benefits.


Stuart Zukerman

Stuart Zukerman, a graduate of the University of British Columbia, has over 32 years of experience in litigation with a focus on Family Law, Personal Injury, Wrongful Dismissal claims, and Collaborative Divorce & Mediation. He has extensive trial experience in divorce, child custody, spousal support, asset division, and ICBC injury claims. As an accredited Family Law Mediator, he helps resolve disputes without court intervention. Stuart has also authored papers on family law and lectured at CLE courses.