|
|
|
Articles
|
|
| What Happens To Your Credit Report When You Divorce? |
What’s the Answer:
A. Your joint accounts are immediately assigned to only one person.
B. Joint account balances are divided according to the individual’s own liability.
C. Joint accounts remain a joint responsibility until the account is fully paid or closed.
D. Once your divorce is official, your credit report starts over.
|
The Answer is C, Joint accounts remain a joint responsibility until the account is fully paid or closed. So what should you do?
* Even before you meet with your attorney or arbitrator, order your (joint) credit report from each of the three bureaus (Equifax, TransUnion, and Experion) by logging into the approved website www.AnnualCreditReport.com. You can also purchase a combined report through several sites such as www.CreditReport.com, or www.TrueCredit.com.
* Make a list of all of your debt, and debit and credit cards, including names, account numbers, amount borrowed and current balance, and any liens that the lender may have. Don’t forget those store accounts you may have not used in a while. In addition, list your cards which you have allowed a second or third user, even if those cards are in another person’s name.
* If you have jointly signed to open an account, you have joint responsibility for that account. Eliminate any and all joint debt, close those joint cards, and open them in your own name. Until the joint debt is paid off, it is shown on the credit reports of both of you, and contract law says you are responsible, regardless of what the divorce degree states. Therefore, any late payments or other negative charges damage the credit of all who signed to open the account. The debt should be refinanced under one name to protect you. (Yes, including the house mortgage.) The best time for all of this paper work is before the divorce is finalized.
* If the joint debt cannot be fully closed, constantly monitor those accounts. Request that the creditor notified you of any problems, late charges, or delinquencies. You may want to pay your ex’s payment(s) rather than have your credit score affected.
* If you are the primary cardholder, call each credit card company to place a freeze on the account, or to find out what you have to do to prevent additional charges on the joint account.
* Keep copies of all of your important document such as tax returns (for three years at a bare minimum), signed divorce decree, birth certificates, bank statements, and anything else you feel might be important.
* Once the divorce is finalized, deposit all alimony and child support payments (cash and check). This is important to show a regular stream of income when applying for a credit card, line of credit, mortgage, or other loan. Request the credit bureaus open a separate account for you. You many need to send them a copy of your divorce decree. Again remember, though, any old joint information will remain on your account.
For a fresh financial start, start with your credit.
Questions? Contact Joseph Reisman at 2751 Coney Island Avenue, Brooklyn, NY 11235-5004
Tel: 718-332-1040; Fax: 718-743-2721; E-mail: JSReisman@TaxHelp1040.com.
|
Posted on Jul 30, 2006 10:46am by JSREISMAN
(Return to Articles)
|
|
|
|
|
Article Categories
|
|
|
|
