REASON # DIVORCE, YOUR CREDIT, AND FINANCESby Victorianne C. Maxwell (Maxwell Law Firm, PLLC)
REASON # DIVORCE, YOUR CREDIT, AND FINANCES
Marital debt is debt you acquire sometimes jointly, during the marriage. Even if your spouse accumulated some debt without your knowledge during the marriage, you may be held responsible for it after the divorce. More often than not the mortgage is a joint debt, so deeding it your spouse incident to the divorce will not sever your responsibility to the lender. Countless divorcees have found their credit ruined because their ex let their house go into foreclosure. Explaining to creditors that you are now divorced won’t make you any less responsible for a mortgage with your on it. The only way to have your name removed from a mortgage after a divorce is to refinance. Keep in mind, the spouse retaining of possession of the home may not be in a position to qualify to refinance the home. If the refinance does not happen, then both spouses will remain liable on the underlying mortgage loan.
If you are in the process of separating from your spouse and or a divorce, one thing you must do is budget. Depending on who will have custody of the children, things like child support and medical insurance have to be factored into your new budget.
Depending on financial stability of your spouse, spousal support or alimony also should be factored into your budget.
Generally your expenses increase in a Divorce, even if you are the spouse receiving the support. This is because you no longer sharing expenses and sometimes debts and or assets.
CREDIT & DIVORCE
Most financial experts will say that Once it is clear to you that divorce is imminent, you should cancel joint accounts and open new individual accounts. Start canceling all existing credit cards and get new ones in your name to ward off credit problems. However, thinking with my divorce attorney cap on I would say that may not be the smartest thing. In North Carolina an equal division of marital assets and debts called equitable distribution is a common thing. In accordance with Divorce Law, this requires you to make this division either before marriage (pre-marital agreement), or after separation (separation agreement), or in a court of law before a judge an Equitable Distribution Hearing. Most people will fall on the later categories and canceling accounts and liquidating other accounts could be seen as more of a negative thing than positive in Divorce Court. Consulting with an Attorney before you make any moves would be smartest thing to do.
WHY YOU SHOULD CONSULT WITH A DIVORCE LAWYER
A Divorce Attorney can sit down with you and let you know what types of things you need to be aware of and what kind of expenses you should expect incident to your divorce. A Divorce Attorney can also set you up with a plan of action for your divorce and the process. Depending on your financial situation, Bankruptcy maybe an option for both you and your spouse before or after you separate.