Evan Vitale

Evan Vitale – Your Credit During Divorce Part II

by

By Evan Vitale

Let’s continue with our second part of our two-part blog series on how to handle and maintain your credit during a divorce.

In our first-part, we shared some thoughts and steps you should take involving joint bank accounts. Now, here are some other items that you should consider that will help you protect your credit during a marital split.

If you have any loans, such as an auto loan, you’ll want to make sure your name (or your spouse’s name) is removed from any joint auto loans. If you’re retaining the car, then the loan should be in your name. However, if you are not able to retain the auto, then you’ll want to make sure your name is removed from the loan, so you’re not obligated.

If there is a house, then this could become a little more sticky as it’s not as easy to drop a person’s name from the mortgage. Usually, if a person is going to keep the house, they will need to refinance the home in just their name (thus, removing the other person from the loan). If this is not possible, then it’s better to sell the house and split the profits (which protects everyone). Of course, there are many horror stories of credit disaster as both names are on the mortgage and the loan is never paid, resulting in foreclosure and destroyed credit.

Once all joint assets have been dissolved, liquid assets (with the help of an attorney) can be divided along with any remaining cash.

You will also need to notify all creditors and banks of your divorce. If a collector is calling on a debt that you are not legally responsible for, you will want to let them know that you are no longer married and therefore no longer responsible for the debt. You might also want to notify them in writing.

Finally, when you feel everything is dissolved and the matter is closed, keep an eye on your credit. Check it regularly. Many times, people are later surprised when something pops up on their credit report that didn’t belong to them and now a credit repair needs to be done. Catching it early rather than later is going to be much better for you and your credit in the long run.

Divorce is a very difficult time, so you definitely don’t want to have credit issues and hassles along the way. Work with your attorney, your banks, your credit cards and loans to solve these matters as soon as possible.

Evan Vitale – Your Credit During Divorce Part I

by

By Evan Vitale

Divorce isn’t fun for anyone, but in the event of an unfortunate divorce, the last thing you probably have on your mind is protecting your credit.

Usually during marriage, one spouse will manage all of the finances (i.e., creating a budget, paying bills, making deposits, savings, etc.). However, during divorce, you want to separate all accounts. You’ll want to make sure whose name is on what account. If the account is joint, then both spouses have the responsibility of making sure the account is paid. Creditors don’t know what the agreement is on a joint credit card balance, nor do they care.

Unfortunately, a joint account usually will remain open and one spouse will run up a large bill. Even during a divorce, both spouses are responsible for the credit card balance. I’m sure we’ve all have friends on both sides of the fence here when it comes to one party running up a credit card balance and the other one feeling like they are suck with the balance.

If you have an individual account with an “authorized user,” then you will want to take immediate steps to remove the authorized user. As long as the “authorized” person is still on the account or credit card, they have the authority to use the card, etc.

In addition, you’ll want to dissolve any joint banking accounts. When cancelling a bank account be sure to do it together, the legal way. That way there won’t be a dispute on the balance at the time of the closing. You may also want to consider removing one of the spouses name, diving up the funds accordingly and leaving your funds in the account in order to keep the account (and any associated bank cards, automatic payments, etc. intact).

More on handing divorce credit in our next blog post!