January 20th, 2011 11:40 AM by Wendy Thomas
All too often, I hear the words, "My divorce ruined my credit, so it'll be a while before I can buy a home." Most statistics say more than half of all marriages end in divorce. But they don't have to end in financial ruin. A divorce can ben devastating, but a little extra time and effort can help to ease the financial burden.
The first thing you have to do is think of it as a "business deal". Take the emotion out of deciding and dividing anything related to your finances. One suggestion is to go ahead and pull your credit report. Use it to go through and decide who is responsible for which accounts being paid. This way, too, you can see the current status of all accounts, whether they are paid up to date or not.
Another "must do" is to go ahead and open your individual banking accounts and credit cards. This makes it easier to divide any liquid assets.
It's important to understand that just because a divorce decree says one party gets the marital credit card debts, that does not relieve the other party of the responsibility to pay off the debt. In other words, if Jack is given the responsibility of paying off the credit cards in the divorce decree, and Jill has made Jack upset, to the point that he wants to ruin her credit, he can stop paying those credit card bills, and they both end up with bad credit. Too often, couples divorce with hard feelings and do what they can to hurt one another, and I'm only suggesting that you take a few extra minutes to think about the ramifications to you BOTH if finances aren't handled correctly!
To that same extent, you may want to close joint credit cards upon deciding to divorce. That will stop the spending ability and leave only the current amount on the card to be paid off... This also prevents an angry spending spree prior to divorce!
The house that I live in now was a foreclosure when I bought it. It was foreclosed on (from what I've heard) because the husband had really upset the wife after the divorce. He was sending her money monthly to pay the mortgage, and guess what? She wanted to ruin his credit, so she just took the money, and didn't pay the mortgage. Not smart on her part, but what a way to keep things going and make it harder on him, huh?
The bottom line-- be smart! Think about the future, for yourself if not for your soon to be ex! Get an intermediary to help if you can't communicate well with one another, but no matter what, a few extra minutes NOW will save you a lot of headache and heartache in the future.