Though specific details vary by province, Canada’s divorce laws are fairly simple and clear. Spouses are supposed to split up their assets as evenly as possible unless the asset in question was yours before you were married. That’s all well and good, but it can destroy some people financially, particularly those who have been dragged into long legal proceedings or who married someone better off than they were at the time and now have sky-high living costs to contend with in the absence of a second income. You may have had joint accounts, need to pay child support, need to make a divorce settlement, become a non-custodial parent of your beloved child, and many other areas have to be settled before you can move on. In other words, divorce can be extremely painful and not just in an emotional sense. Other than the standard divorce proceedings, what about your financial situation? The credit cards, the debt, the mortgage? Who will pay them off and will your credit history take a hit? Here’s how you can overcome financial obstacles thrown in your way by divorce.
Divorce and Credit Damage
Divorce includes a lot of uncertainty. Where are you going to live? Will you get to keep the car? If not, will you have enough money left over after the divorce is through so you can buy a new car? Answering questions like these is always tough and it’s even tougher when your heart is broken and your brain is distracted by the stress of your current situation.
It can happen suddenly—one minute you have a stable life with your spouse and a financial plan for the future and it seems that the next you’re suddenly running up your credit cards and trying to make ends meet as you struggle to keep it together and work and live your life like normal. Even if you’re happy that the marriage is over, it’s a stressful time, particularly if there are kids and assets involved.
Sadly, it’s normal for divorce to have a devastating impact on our finances. Few of us are so fortunate that we can undergo such major financial trauma without it impacting our credit. Whether through missed payments, high balances, or unwise decisions made out of necessity, most people who go through divorce in Canada see the economic impact reverberate throughout their lives, eventually showing up in negative ways on the divorcee’s credit report.
Who Keeps What?
On top of all that, the division of assets in your divorce might leave you without a car.
It could be that the judge decides to give your spouse the car in your division of assets or that the car belonged to your spouse in the first place. You may be ordered to sell the car to liquidate your assets and split the proceeds down the middle. By the time you get done paying your legal bills, moving costs and other associated expenses, you might not have much money left over to get a new car, if any.
This can have a huge impact on how a divorced person bounces back and starts their new phase of life. Most Canadians rely on their cars to get to work. So, if you aren’t in a big city with good public transportation options and can’t afford taxis, you might find yourself out of a job if you don’t have a car.This is an especially difficult position to be in if your credit score has taken a nosedive during the divorce. If you don’t have the cash on hand to buy a car outright and your credit is below 650, meaning that most lenders won’t even consider your application, you may feel like you’re out of options. But, in actuality, you just need to change the way you think about your current situation.
Get Back on the Road and Work on Credit Repair After Divorce
Divorce is common and it doesn’t mean you’re a bad person or untrustworthy in any way. It just means you went through a devastating experience that a lot of people go through in their lifetime. If this had a bad impact on your credit, we understand. We’ll examine other factors when we consider whether you’re a good candidate for our lending program.
As long as you meet a few minimum requirements, including age and a threshold for monthly income from all sources (including spousal support), we’ll work with you to find a good car and a good lending situation for your needs. Even if you have a low monthly budget, we can help you get back on the road. Your divorce shouldn’t be a weight that holds you back from future success. Now that you’re free and independent, you should be able to enjoy your life.
We can help you get back on that path.
How does a car loan help with credit repair? If you choose your loan carefully, set a
realistic budget, understand the terms of your loan agreement and go with a reputable lender, your monthly payments will have a positive impact on your credit score. You’ll show that you’re bouncing back and putting your divorce behind you in more ways than one. Choosing the budget for your car can also help you adjust to your new financial reality and take stock of the financial requirements you’re dealing with after you and your former spouse have officially parted ways. This awareness makes it easy to avoid damaging your credit in the future.
Very few people are eager to get a divorce and not just because they genuinely love their spouse even if the relationship isn’t working out. Divorce is time-consuming, expensive, and potentially damaging for the finances. This is especially true if you were already in a precarious position before the marriage ended. In fact, some people get divorced specifically because their irresponsible spouse caused financial problems that remain after the official legal end of the marriage. It is not right that anyone in this situation should be caused to suffer further and be barred from having the opportunity to repair their credit. Traditional lenders and big banks may not be sympathetic in these situations.
Canada Credit Financial’s blog is a free resource for credit challenge customers who have the desire to improve their lives by acquiring the knowledge required to increase their credit score. Our team understands that even good people are often forced to go through tough times. A divorce, a loss of income, an illness, or other similar circumstances out of your control might have put a toll on your credit history and your financial life. We want to help by giving you access to quality content that will provide you with the know-how, the tools, and the strategies to get back on your feet and enjoy the freedom of a healthy credit score.
Our writers specialise in automotive financing. To our knowledge, the purchase of the right vehicle, at the right price, financed from the right lender, at the right interest rate provides one of the fastest and most robust ways to rebuild your credit history. It’s impossible to erase bad credit, but rebuilding a solid and diligent payment history through a vehicle financing is a great way to separate yourself from your past credit bumps to enjoy a better future.
You can also use the information to protect your current credit, avoid pitfalls, and educate your children so they are prepared to enter the world equipped with the knowledge that will give them an edge and will allow them to fulfil all their dreams.
Credit is a great tool if used properly. At Canada Credit Financials, we want you to control your credit; we don’t want credit to control you.