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Divorce

How To Keep Divorce From Ruining Your Credit

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By Jenny Staton – Lender Direct Sr. Loan Consultant

Not only can divorce lead to emotional strain, it can also cause all sorts of financial problems. All those shared accounts and co-signed loans that once seemed so romantic are now the cause of major issues. The following important tips can help avoid financial damages due to a divorce.

Creditors aren’t interested in how property and bills are divided during divorce. If you have debt in joint accounts with your spouse, you are both responsible for paying it back.

Creditors are not legally bound to abide by your final decree of divorce. A judge’s order does not override what you owe your creditors and most attorneys don’t alert their clients to the potential for problems if one spouse does not follow the court order. Below are some tips that will help keep divorce from ruining your credit.

Allow One month to make these changes:

  1. CLOSE JOINT ACCOUNT:
    Before you separate when possible, close all joint credit accounts. Closing them before divorce proceedings will keep an angry spouse from using the account and running up charges that you may later be held responsible for.
  2. GO FROM JOINT ACCOUNTS TO SEPARATE OR INDIVIDUAL ACCOUNTS:
    You should seriously consider turning all credit cards, gas cards and any retail accounts into individual accounts. Doing this will mean not having to re-establish credit in your own name after the divorce because you will already have it. It can also cut down on the amount of friction once the divorce process starts.
  3. SETTLE WITH CREDITORS:
    Offer to close the accounts by paying a smaller amount than is owed. If this is done, get a letter from the creditor that the account has been paid in full and a written promise that they will not file anything derogatory about the account to the credit reporting agencies.
  4. FREEZE ACCOUNTS:
    If you are not able to pay off or come to a settlement agreement regarding the balance owed this would be your best move. This will keep you from being able to use the account but will also protect you in the long run. Once the divorce is final, the balance owed on the account can be transferred to the party the court holds responsible for the debt. If the responsible party does not pay the debt then you don’t have to worry about it affecting your credit score.
  5. CONTACT YOUR CREDITORS:
    Alert them to the fact that you are going through a divorce. If there is a change of address, make sure they know it so that you will continue to receive bills from all joint accounts.
  6. MAKE SURE ALL BILLS ARE BEING PAID:
    Divorce proceedings can take months and all it takes is one late payment to hurt your credit. Even if you have to pay the minimum on accounts that you know will ultimately be your spouses responsibility it will be worth it.

If you have additional questions on what you should and shouldn’t do when it comes to your credit be sure to check with an attorney or financial adviso. Laws do change, so make sure you know what your options are should it come to the point where divorce is inevitable.

Four Ways Grandparents Can Help During Divorce

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Divorce affects a lot of people. Of course the two partners and spouse and children suffer the most impact, but parents and in-laws will also feel the change.

Grandparents are often not thought of at the start of the divorce process, but they can play a large role as things move forward. Here are some areas to consider if you’re the grandparent during a divorce.

Offer a Comfort Zone – Naturally your grandchildren will be feeling hurt and confused by the process. Grandparents can offer a comfortable home where everything has stayed the same. Try to keep it that way and offer a shoulder to cry on or an open ear. It’s common for children to confide in grandparents or other relatives because they are scared to do so at home. But don’t spend all your time on that topic; be sure the child has a place to get away from the big changes occurring in his/her life.

Think Switzerland – Of course you have your own feelings of anger, frustration, or hurt about the divorce. Maybe your son or daughter-in-law cheated on your son/daughter. But that person is still your grandchild’s parent and it’s up to you to present a neutral front. Expressing your anger or taking sides is only going to hurt your grandchild more as he/she works through feelings about both parents.

Get Over the Guilt – As a parent, you are wondering about your daughter/son’s divorce. Could you have done something to help? Should you have shared your reservations about the relationship sooner? You may even recognize some of the fault with your child and then feel guilty about that, or feel divided loyalty. As the saying goes, there is no point in crying over spilled milk. What you can do now is be a force for optimism and positive change as your family navigates toward a new way of life.

Stay in Touch – If your in-law child ends up with custody, you may fear losing touch with your grandchildren. It’s a valid fear because this does happen. Do your best to keep a strong relationship with them by setting up outings and celebrations. It’s also good to stay in touch with your in-law child, if possible. Obviously that depends on how the relationship ended, but if you can be friendly and coordinate with that parent, it will certainly make things easier for future birthday parties and holiday gatherings.

Grandparents who are concerned about these topics should call or email our office to schedule an appointment to talk about the unique role they can plan. We can be reached at (626) 219-2480 or by email info@divrocehelp.org

Divorce Is A Team Sport

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Divorce affects you, your finances, your family, and every other aspect of your life.  It’s critical that you go through the process correctly so you get the most favorable outcome possible.  There’s no do-over.  You get one shot to lay the foundation for your future.  Do it right!  The best way to ensure your interests are protected is to assemble a team of professionals to advise you along the way.  A quarterback would not go out on the field alone and expect to score, would he?  No way; he’d get pummeled!  Instead, he would surround himself with qualified individuals to fill the positions needed to run the plays and get down the ball down the field.  You are the quarterback in your divorce.  And you need a team.

The team you assemble will depend on the specifics of your divorce.  Every divorce is unique, thus each team is different.  Here are a few of the players you may need on your team:

Attorney.   Since divorce is a legal process most people know they need a lawyer, which is a good start.  But don’t hire just any attorney, find the right lawyer for you.  Consider your options: do you just need an attorney consultant to help you along the way on an “as needed” basis?  Can you and your spouse use a mediation service to reach a resolution?  Do you need to lawyer up and go to battle? Ask your friends or trusted professionals for recommendations.  Do your research. Interview attorneys or mediators until you find one you are comfortable with and who fits your situation.  Do you really need a $600 an hour pit bull for a low conflict divorce?  Probably not. Take the time to find the right legal professional for you and your situation.

Financial Advisor.  Divorce involves a division of all assets and debts.  Your divorce will have a significant impact on your financial future.  Get someone to help you evaluate the assets and debts obtained during your marriage, establish a realistic budget for your new life, determine how to meet financial objectives, avoid tax consequences, consider hidden expenses, etc.  For example, if you want the house do you really know how much it is going to cost you to maintain it? Do you know its condition?  Are there liens against it you’ll have to pay?  Don’t be surprised after the fact.  Also, your advisor can help you evaluate and obtain financial services you need such as bank accounts, insurance, retirement accounts, estate planning, real estate appraisals, etc.  A good financial advisor can help you evaluate assets, prepare for your financial future, and make decisions that will maximize your settlement.

Therapist.  Even if you want the divorce and/or it is an amicable split, a divorce can be really difficult emotionally on you and/or your children.  Don’t sweep it under the carpet.  Get some help before, during and/or after the process so you get get through it as emotionally healthy as possible.  A good counsellor can help you make the decision to split, advise you how to tell your children and help them through the process, and work with you to recognize your shortcomings in the relationship so you don’t make the same mistakes again.  Like a lawyer, you want to find the right therapist for you…and there are a lot of different types. Therapists specialize in a myriad of issues including addiction, abuse, adultery, etc.  You may need a professional to advise regarding co-parenting, custody considerations for special needs children, helping children cope, etc.   Your therapist may also be able to direct you to support groups, children’s programs, and other services relevant to your needs.  Get the right help so you and your family can move forward as emotionally healthy as possible.

Again, every divorce – and every team – is unique.  These are just a few potential team members you may need but there are many, many other resources available.  Take the time to determine who you need on your team, fill the positions with qualified professionals, and use their expertise.  Don’t use your lawyer as your therapist, and don’t get your legal advice from your pals. You will not regret getting professional advice through your divorce process. If you need assistance putting together YOUR team, please do not hesitate to ask your Second Saturday Team to refer you to the right resources for your needs.  We are here to help – and cheer you on – throughout your divorce process and beyond.