Divorce or dissolution of marriage is the termination of a marriage.
Divorce can be contrasted with an annulment, which is a declaration that a marriage is void, though the effects of marriage may be recognised in such unions, such as spousal support or alimony, child custody, child support, and distribution of property.
The above is from WikipediA, the Free Encyclopedia. (does anyone use a dictionary anymore?)
Why would I be blogging about Divorce on my ActiveRain blog? No!! I am not getting divorced…. I have a life sentence with no possibility of parole!!
No, I am talking about the effects of Divorce on your credit!! And how that affects YOU in getting a home loan!!
I get all kinds of stories about divorce in my business. The one that really made me squirm was when I was going over a couple’s credit report face-to-face in my office and I asked the husband about one of his collection accounts. He dropped his head.....…. And the wife spoke: “That was his ex-wife’s account….. That she opened AFTER they were divorced”!! Holy smokes… The wife was livid. I think a little fire-ball actually shot out of her eye in my direction!!!
You see… Divorce can be ugly. And the division of assets/kids can be worse. But there is something you can do to protect yourself from the little ‘couple story’ that I described above.
Order your credit report!! Find out what is on there…. Is there some joint accounts that you don’t remember? <= The ex-spouse can still use them!!
Did you know? That divorce does NOT cancel your contracts signed while married? So, you give him the VISA and you keep the Mastercard…. Do you realize that you are STILL RESPONSIBLE for his/her debt incurred even if it is after the divorce?
Well… YOU ARE!!!
What do we do about that?
1. Close all joint accounts (balance transfer ½ to each others new cards?!?!).
2. Check credit reports for any old open accounts that you are unaware of today.
3. Contact a Credit Expert for advice. Can be your CPA, Financial Advisor or even your Friendly Local Mortgage Banker.
Look…. This isn’t advice on your divorce… This is advice on how to protect your credit through divorce. I wish you well in these times and hope that you can follow this advice.
Here is a good read=> http://dallasloanguy.com/docs/about_credit.pdf
The e-book I have linked to you is Free to download and there is no form to fill out so that I can capture your email address or anything. Read this book…!! Understand credit…. Understand your RIGHTS!! And if you think that you have good credit and don't need this remedial reading.... Think again. Some of the worst credit I have seen has come from 'rich people'.
The DallasLoanGuy is available for Free One-On-One credit counseling for anyone willing to pay my cost of a credit report. <= One caveat is that you have to read my book first!!! <= Now, how hard is that?
Tom Burris
DallasLoanGuy.com
Dallas, TX
"Your Dallas Mortgage Consultant"
http://www.dallasloanguy.com/
Texas Home Loans Dallas Mortgage Loans
I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!! Subscribe to My Blog and stay informed about current lending changes!!
While I personally focus on Texas Home Loans and First Time Home Buyers.... I do lend in other areas. We are in about 46 States and adding programs to bring full service to an area near you.
Tom.... some good information. I have seen credit ruined after a divorce becausethey didn't do some of the things that you suggested... good post.
Thanks Jeff.....
I am sure that you just got a blog idea...... About how you can work around divorce stuff under certain circumstances with FHA.
(I did say 'certain situations' right?!?!?!)
;-)
For the record.... Single females who have to flee a bad situation with the kids will get 'consideration' for their late pays and collections.... Not the same for a couple who just fought it out and stopped paying!!!
Tom, it is tough when working with divorcing couples. Many times we close in separate rooms. Didn't know you can take the credit card and transfer balance to 2 separate cards. Do the cc companies always do this?
You would be surprised how many people ask me if they do a quit claim deed to one party if they are free from the mortgage obligations?
Hi Missy!
Great question!! I should have been more clear.
NO!! The credit card companies will not always do this and it is something you should do before the divorce is completed. If you think about it, why would they? They wouold rather keep 2 people on the hook for the bill if they could.
Hello Mary Ann!
Yes, the arrogance catches up to them sometimes..... or is it their numb skulls that cost them?!?!? LOL
This is actually a good idea for blogging. At first I wasn't sure, until I read it further. Good information.
Tom, no one wins do they? I think both parties credit takes a hit. I have been caught right in the middle of several clients who have got divorced; I feel like I'm walking a tightrope. I've made it through and got the house sold but like I said no one wins.
Hey John: I see it all too often.
Marchel: The person who 'does the bills' has an upper hand and things can 'pop up'. I have counseled several people thru this and all have fared better as a result. The trick is to get them to me before the divorce starts to get nasty.... when they still think that they can work together.
If I ever got a divorce I think I would be safe from the mess you have pointed out. See, I am in charge of the finances and he does not take any credit out. I am the only one that authorizes any new accounts. I have opened up accounts for him in the past and then closed them. I did this to build his credit because he has been through many divorces. I request credit reports every year to see what is on them.
Angelia: Thanks for stopping by.
While I see both sexes have their credit ruined.... the women usually don't have as much credit. I guess the 'man' still does the banking for most.
But the gap is narrowing, as you testify.