DEAL WITH CREDIT BEFORE DIVORCE
Divorce can have unexpected effects on your credit. If you are at the point of considering a divorce, you need to find out how to deal with your finances before you receive the possibly devastating injuries to your credit. Know your total debt situation. You might want to have legal advice as you go through the division of finances.
The recommended time to do this is prior to the finalization of the divorce. You should examine credit reports of both partners. Fix any errors. Continue to deal with the rest of your finances.
Joint responsibility for a home mortgage will need to be reworked. Such an issue needs careful management especially when child support and alimony is in the mix. It's possible that you may decide to sell the home and split the proceeds or you may sell the home to one partner as responsible party.
Other debts including cars, credit cards, utilities, loans also need to be only in one name. These decisions are not easy ones but are necessary.
When credit cards are in both names, get them changed to one name only. If this is not done and payments stop (even though one of you has been deemed responsible), creditors can come after the other partner. This can lead to going to "collection" and numerous unpleasant collection calls. Eventually this situation can lead back to court battles. You should know that the poor credit of one partner can affect the credit of the other.
You want to make certain that all cash assets are divided. Then, close all joint checking and savings accounts. One spouse should not be able to get to the accounts of the other.
During this process, pay all debts even if you have to sell some things to do so. This way, you are each then responsible for your own individual debts. You want to have your own financial base when you leave the marriage.
Your divorce decree will spell out financial arrangements and the party responsible for each debt. However, if there are still joint debts, these can make life miserable if a creditor is not receiving payment and cause problems for the spouse decreed not responsible. Be proactive about this situation.
The recommended time to do this is prior to the finalization of the divorce. You should examine credit reports of both partners. Fix any errors. Continue to deal with the rest of your finances.
Joint responsibility for a home mortgage will need to be reworked. Such an issue needs careful management especially when child support and alimony is in the mix. It's possible that you may decide to sell the home and split the proceeds or you may sell the home to one partner as responsible party.
Other debts including cars, credit cards, utilities, loans also need to be only in one name. These decisions are not easy ones but are necessary.
When credit cards are in both names, get them changed to one name only. If this is not done and payments stop (even though one of you has been deemed responsible), creditors can come after the other partner. This can lead to going to "collection" and numerous unpleasant collection calls. Eventually this situation can lead back to court battles. You should know that the poor credit of one partner can affect the credit of the other.
You want to make certain that all cash assets are divided. Then, close all joint checking and savings accounts. One spouse should not be able to get to the accounts of the other.
During this process, pay all debts even if you have to sell some things to do so. This way, you are each then responsible for your own individual debts. You want to have your own financial base when you leave the marriage.
Your divorce decree will spell out financial arrangements and the party responsible for each debt. However, if there are still joint debts, these can make life miserable if a creditor is not receiving payment and cause problems for the spouse decreed not responsible. Be proactive about this situation.
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With unprecedented problems in the credit markets it?s more important than ever to have excellent credit. For more information check out Rob Kosbergs' Detailed FREE Guide on Maintaining and Repairing your Credit Score by going to Bad Credit Repair for your FREE information.
posted by Credit Counseling at
2:11 AM
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