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Tuesday, April 2, 2013

Helpful tips for selling or purchasing after a divorce




While we may not plan for a change in our family dynamic - here are some helpful tips should you find yourself selling or purchasing after a divorce.

Divorce
With divorce and separation come new experiences and responsibilities. Suddenly words like “child support payments” and “100 percent liable for bills” enter the picture. If you ignore your increased your financial obligations or fail to separate your accounts, it may be hard to open new accounts and obtain new loans in your name. But there are many moves you can make to protect and restore the good credit that took years to build.

Get your credit report
Before you begin, get an idea of what your credit report looks like. Visit annualcreditreport.com to obtain current information reporting to all three repositories.

Protect your good credit
Your divorce decree does not relieve you from joint debts you incurred while married. You are responsible for joint accounts, from credit cards and car loans to home mortgages. Even when a divorce judge orders your ex-spouse to pay a certain bill, you’re still legally responsible for making sure it is paid because you promised - both as a couple and as individuals - to do so.

The credit grantor (a bank, credit card issuer, Mortgage Company or other credit card lending business) also has a legal right to report negative information to a credit reporting agency if your ex-spouse pays late on a joint account. If your ex-spouse doesn’t pay at all, you’ll probably have to pay - or the grantor can take legal action against you.

  • Close or separate joint accounts. If you can talk to your ex-spouse, you can save a lot of grief. Analyze all your debts and decide who should be responsible for each.

  • Call your creditors and ask them how to transfer your joint accounts to the person who is solely responsible for payments. However, you still might have legal responsibility to pay existing balances unless the creditor agrees to release you from debt.

  • Take stock of your properties. You may have to refinance your home to get one name off the mortgage. Or you might need to sell your home and divide the proceeds.

  • Keep paying all bills. Until you can separate your accounts, neither of you can afford to miss a turn paying bills. During divorce negotiations, send in at least the minimum payment due on all joint bills. Miss even one payment and it stays on your credit profile for up to seven years, making it hard to obtain new credit in your own name. Beware of well-meaning friends and relatives who may tell you to ignore making payments or to run up debts. Always make all payments with at least the minimum due.
     

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