Divorce Affects Credit Big Time

Posted on | January 15, 2009 |

by Rob Kosberg

When you are about to file for divorce, you know that this is a horrible experience no matter how much you want to do it. There are things you both need to know about and deal with when considering your financial issues. Legal advice may help with this.

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.

If you are jointly responsible for a home mortgage, you may want to sell the home to a stranger. You can also sell the home to your partner. That makes the mortgage no longer a joint responsibility.

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.

Credit cards in both names should be changed to one name. Should this not be done and payments to credit card companies stop, it is possible that the companies will insist on payment from the other spouse. The debt could end up in collections and result in messy collection calls. Such a situation can lead back to court and get nasty. Be aware before something negative happens that the poor credit of one spouse can show up on the report of the other, even if divorced.

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.

About the Author:

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.