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Saturday, January 24, 2009
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.
Finances should be worked out, if at all possible, before the divorce is completed. Credit reports for each partner need to be secured, examined and fixed so that both reports are accurate. When you examine your finances you will e able to see what credit issues need to be decided.
There are issues if you are responsible together for a mortgage. Home issues need to be carefully managed particularly if there is alimony and child support involved. You may decide to sell the home or to let one partner buy it. That would take care of that joint loan.
You will need to also arrange to have other debts such as cars, credit cards, utilities, etc. in one name only. These are decisions that will need to be made by both of you and are not always easy.
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.
Figure out all cash assets and how these will be divided. Do the split, close any joint checking and savings accounts and open accounts in individual names. No one can get to the other's money.
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.
Finances should be worked out, if at all possible, before the divorce is completed. Credit reports for each partner need to be secured, examined and fixed so that both reports are accurate. When you examine your finances you will e able to see what credit issues need to be decided.
There are issues if you are responsible together for a mortgage. Home issues need to be carefully managed particularly if there is alimony and child support involved. You may decide to sell the home or to let one partner buy it. That would take care of that joint loan.
You will need to also arrange to have other debts such as cars, credit cards, utilities, etc. in one name only. These are decisions that will need to be made by both of you and are not always easy.
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.
Figure out all cash assets and how these will be divided. Do the split, close any joint checking and savings accounts and open accounts in individual names. No one can get to the other's money.
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 never before seen challenges 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
5:42 AM
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