Contributing Factors

Divorce decrees assign responsibility for debts, but creditors are not bound by these agreements. If an ex-spouse fails to pay a joint debt, the creditor can still pursue both parties, potentially damaging your credit.

A charge-off occurs when a creditor writes your debt off as a loss, typically after 180 days (6 months) of non-payment. This does not forgive the debt; it is sold to a collection agency while remaining your responsibility.

Potentially, yes. Many employers and landlords check credit reports as part of their screening process. A recent charge-off may be seen as a sign of financial irresponsibility and could cause a application to be denied.

Yes, this is one of the most effective strategies for many. Selling a larger family home can free up substantial equity to pay off a mortgage, significantly reduce property taxes, insurance, and maintenance costs, and simplify your life as you enter retirement.