So, if the husband misses a couple of payments out of necessity or negligence, those late payments will wind up severely impacting the credit score and credit history of the ex-wife, who believed she was free from the debt.3 expensive business mistakes most grouping attain during a split

If prior to the Divorce you have joint ownership of any automobiles, you’ll want to explore the same 2 options listed above for the Mortgage. The goal is to either completely wipe out the debt with the sale of the car or to refinance it so that the owner of the car, after the divorce, is also the only person legally obligated to make payments on that debt.

2) Refinance It – The spouse retaining the home would refinance the mortgage in their own name while also removing the ex-spouse from title to the property. This protects both parties from any future payment issues and the credit challenges that result.

If some of the options just aren’t feasible in your situation and your ex-spouse will be responsible for making payments on a joint debt, it’s your responsibility to monitor that account and ensure it is being paid on a timely basis. This can be done by having copies of the bills sent to your home, gaining online access to the account, or regularly checking your credit report.

If your ex-spouse is unable to make the payments in a timely manner, regardless of what the Divorce Decree says, to protect your credit, you will need to jump in and begin making payments on that account.

3) Freeze the Account – If you cannot afford to pay off the existing debt and have difficulty applying for new credit, another option is to have the account frozen so new charges cannot be added. While this won’t eliminate your obligation to ensure the debt is being paid, it will prevent your ex-spouse from charging more to the account.

Now, don’t forget those credit cards!

1) Sell Something – The first option is to sell a joint asset and use the proceeds to wipe out any and all outstanding credit card debt while also closing the accounts or converting them into individual accounts.

For example, the Divorce Decree may spell out that the ex-husband will take over sole payment of an auto loan for a car that was retained by the ex-wife. If the ex-wife, at the time the auto loan was applied for, was included on the application, she is equally responsible for the repayment of that loan, regardless of what the Divorce Decree says.3 expensive business mistakes most grouping attain during a split

It’s not uncommon at the time of divorce to have outstanding credit card debt that is jointly held. You have 3 options to handle this debt to protect you from future problems:

Now, it’s time to look at the Mortgage:

Anyone considering a Divorce should seek legal counseling due to the complexity of what is involved. Do not be bashful in bringing up these issues with your Attorney to prevent a financial nightmare down the road.

What about those cars?

The 3 areas that are commonly mishandled are Mortgages, Auto Loans, and Credit Cards.

2) Apply for separate credit – The second option is for each spouse to apply for new credit in their own name and then transfer their share of the existing debt into their new account while closing out the joint account.

Thoroughly review the report and identify how each account is listed. Is it an Individual Account (only you are responsible for repayment), a Joint Account (you and another party are equally responsible for repayment), or are you simply an Authorized User (you have access to the credit available but not legally obligated for repayment)?

The mortgage will most likely be the largest debt listed on your credit report and is one of the most important from a credit scoring standpoint, so it should be your top priority.

Unfortunately, many people neglect to handle outstanding debts in a manner, through the divorce, that will prevent serious financial problems down the road.

Anyone considering a Divorce or who did not address these areas properly during a Divorce should start by ordering a copy of their Credit Report. (Note: US Consumers are entitled to one free report each year from the 3 Credit Bureaus at AnnualCreditReport.com).

The primary issue results from many believing the Divorce Decree will supersede any original debt obligations or contracts and the impact that can have on someone’s credit and their ability to obtain financing, employment, or housing in the future.

1) Sell It – This is often an emotionally difficult choice to make, especially if kids are involved, but may be the only option if the spouse who will be residing in the home cannot qualify to refinance the existing mortgage in their name alone. This option allows you to wipe out the debt completely.

The ultimate goal is to ensure that you, and you alone, are responsible for the repayment of any debt listed on your report. You also want to ensure that your ex-spouse does not have access to any credit through a joint account or acting as an authorized user.

Each year in the United States there are over 1 Million divorces. There is a lot of great information available to those considering divorce on how to divide up marital assets, determine the custody of children, and deal with the emotional toll a divorce can take on its participants.

You have 2 options:

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