Saturday, January 30, 2010

Protecting Your Credit During A Divorce

Protecting Credit During Divorce Chances are you know someone who is facing the challenges of divorce. Going through this process can be emotionally and financially difficult. Failing to address important credit issues, however, will only make things worse. Remember, a divorce decree does not absolve credit contracts or relieve responsibility for any and all debt incurred during the marriage. The following is a proactive plan to maintain healthy credit both during and after a divorce. Know Your Credit – Obtain copies of credit reports from all three bureaus right away (Experian®, Equifax, and TransUnion®). Organize The Facts – Make a list of ALL open accounts and create a spreadsheet with creditors' contact info, account number, type of account, balance, monthly payment, and the name of the vested spouse. Take Action – Sell or refinance secured credit assets (e.g. car, house, etc.) if possible, ensuring that loans are either paid in full or that only the vested spouse's name remains attached to the account. Immediately close any unsecured accounts (e.g. credit cards, etc.) with no balance. For those accounts with a balance, have them frozen to ensure no future charges can be made. A Few More Tips – Only a creditor can change the terms of a credit contract. A judge may order one spouse to pay off a joint account, but both parties are still responsible in the eyes of the creditor if the debt is unpaid. If possible, pay off these accounts quickly to help maintain good credit. However, if one party is ordered to pay off the debt of an open joint account, that party should be sure that the title reflects this change to avoid paying for something he or she no longer owns. 

 All About News, Inc. Presented by Don Jareki of Heritage Mortgage via Rita Legan ASP Staging Realtor and eagent.
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