Take steps to protect your credit during divorce
When your marriage is on the slide, all too often your credit score takes a hit as well. While a divorce decree ends one type of relationship, your creditors don't want you to leave them, unless it is on their terms. You can take steps to protect your credit during divorce.
How you deal with the related credit issues pertaining to a marital separation and divorce is important for both your short and long term financial recovery. Many credit restoration companies thrive when the divorce rates rise. In challengiong financial times, debt management can take on a whole new meaning.
When divorce hits and credit suffers, you are likely to end up with high-interest credit cards and auto loans. Here are a few suggestions to help avoid such quagmires:
Pay up joint debts and cancel joint credit cards after you get a card in your name.
If joint debts can't be paid off, freeze those accounts so that neither you or your ex can run up more debt.
If you're merely a credit card user on your spouse's card, remove your name.
When it comes to the family home, consider selling it if necessary. If one of you can buy the other out of the marital home, it can avoid a lot of delay and uncertainty, especially in a declining housing market. If the buying spouse can qualify for a new mortgage in his or her own name, there can be creative options in further dividing marital assets and debts.
Consider paying off any vehicle loans as part of any house refinancing if possible. When starting anew, the fewer debts the better. Minimizing your debt is probably a good idea regardless of one's marital status. If you are falling behind in bills, due to job loss or illness, do not avoid your creditors and try to work out arrangements. Unpaid debt, joint or individual, will be reported to the three national reporting agencies resulting in lower credit scores.
When the tough times hit, hope for the best, but plan for the worst. Take precautions to protect your credit and your good name. Regardless of a divorce, if there is joint debt - a mortgage, car loan or credit card --- you are both on the hook to pay it off.
When divorce cripples the family budget, not only does the stress level rise, but so too, does the likelihood of filing for bankruptcy. Despite new laws enacted in 2005 that tightened the requirements for bankruptcy, many people still see it as an easy way out of crushing financial debt. Unfortunately, some spouses also believe bankruptcy will allow them to escape their spousal or child support obligations during or after the divorce; wrong.
If your spouse or ex files for bankruptcy, you should seek legal counsel to protect you rights as a creditor.
How you deal with the related credit issues pertaining to a marital separation and divorce is important for both your short and long term financial recovery. Many credit restoration companies thrive when the divorce rates rise. In challengiong financial times, debt management can take on a whole new meaning.
When divorce hits and credit suffers, you are likely to end up with high-interest credit cards and auto loans. Here are a few suggestions to help avoid such quagmires:
Pay up joint debts and cancel joint credit cards after you get a card in your name.
If joint debts can't be paid off, freeze those accounts so that neither you or your ex can run up more debt.
If you're merely a credit card user on your spouse's card, remove your name.
When it comes to the family home, consider selling it if necessary. If one of you can buy the other out of the marital home, it can avoid a lot of delay and uncertainty, especially in a declining housing market. If the buying spouse can qualify for a new mortgage in his or her own name, there can be creative options in further dividing marital assets and debts.
Consider paying off any vehicle loans as part of any house refinancing if possible. When starting anew, the fewer debts the better. Minimizing your debt is probably a good idea regardless of one's marital status. If you are falling behind in bills, due to job loss or illness, do not avoid your creditors and try to work out arrangements. Unpaid debt, joint or individual, will be reported to the three national reporting agencies resulting in lower credit scores.
When the tough times hit, hope for the best, but plan for the worst. Take precautions to protect your credit and your good name. Regardless of a divorce, if there is joint debt - a mortgage, car loan or credit card --- you are both on the hook to pay it off.
When divorce cripples the family budget, not only does the stress level rise, but so too, does the likelihood of filing for bankruptcy. Despite new laws enacted in 2005 that tightened the requirements for bankruptcy, many people still see it as an easy way out of crushing financial debt. Unfortunately, some spouses also believe bankruptcy will allow them to escape their spousal or child support obligations during or after the divorce; wrong.
If your spouse or ex files for bankruptcy, you should seek legal counsel to protect you rights as a creditor.
About the Author:
If you are considering a separation and divorce, have concerns about your finances, credit and legal rights get Free Divorce and Financial Information and Resources. It is important to avoid credit problems when you are in transition. At the Divorce Without Dishonor website you can find Free Divorce and Financial Information and Resources
posted by Debt Consolidation Loan at
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