Divorce and Credit scores

[haha]

Quote:

Originally Posted by clifp So let me ask slightly different question. Are there any tips people have for a couple getting a divorcee...

This gets juicier every time you post. Keep 'em coming, ya here?

[Nords]

Quote:

Originally Posted by cute fuzzy bunny When you get divorced and close the joint accounts, those disappear and only your individual accounts fully 'count'.

Hunh. 21+ years of marriage but spouse and I have never had joint credit-card accounts. We don't even have a joint checking account, although we hold the assets in our ER portfolio jointly.

Of course this started back in the 1980s when one of us would be in the western Pacific and the other would be several time zones away. We felt it was better to each have our own individual cards so that we didn't have to try to track each other's charges before hitting a limit.

For some reason spouse now has a higher credit rating than me. Maybe it's because she actually has a W-2.

[cute fuzzy bunny]

Cool. You're good to go.

Now all you need is a girlfriend that wants an expensive car...

[growing_older]

Quote:

So let me ask slightly different question. Are there any tips people have for a couple getting a divorce

First, don't acquire a girlfriend until your divorce is really final. If there was any intention or possibility of reconcilliation it will certainly be made more difficult. In fault states you could be materially hurting your case, in non-fault states you could be establishing a pattern of behavior that could be used against you later if you end up in court. Even more so if kids are involved.

Second, try for a non-adversarial split and divorce agreement if that's where you are going. There are mediators who specialize in this. Lawyer fees can easily exceed the value of what you are haggling over.

Third, no agreements count for anything except the final decree.

Fourth, I suggest you try to be honorable, but don't trust that your soon to be Ex will be. Divorce and money both have a way of bringing out the worst in people sometimes. Try not to stoop to that level if you find yourself in negotiating hell, but equally try to be alert for bad faith. Note: some lawyers seem to think it is their job to try being as adversarial as possible, up to and including dirty tricks. If you see that developing from either side, you'll want to try to cut it off before it gets out of hand.

(Beware, there are financial complications such as tax treatment of different kinds of assets that most divorce lawyers and even financial planners don't understand and will confidently steer you wrong.)

Fifth, if there are kids involved their welfare should take precedence, but very few adults (especially divorcing adults) seem to be able to make the leaps involved to understand that.

And --- nothing about divorce --- as a general rule, co signing a car loan is a bad idea. If the would be buyer cannot swing the credit to qualify alone, then they should consider another vehicle. Aside from the rare instance where a co-signer is helping a young adult get credit established, this should be a red flag. In a divorce (actually separation and a girlfriend on the side) this should be unthinkable.

[SecondCor521]

clifp,

A couple of comments:

1. As previously said by other folks, your friend is an idiot to co-sign. Editorial comment: He's also an idiot for having a girlfriend before he divorces his wife. Sorry, that's sort of a hot button for me.

2. As odd as this may sound, in my state, Husband could co-sign the car loan for Girlfriend and it would be considered a marital debt of Husband and Wife, thus obligating Wife to effectively pay off half of the Girlfriend's car. This can lead to some "mutually assured destruction" scenarios. (I live in a community property state.)

3. My credit score was nearly 800 immediately and I bought a house approximately two weeks after my divorce was final. The difference in my case is that all of the credit cards, loans, and mortgages were either joint or mine, and the few joint accounts I ended up having to close didn't affect me much. I think for women divorce could easily harm their credit more unless they follow Nords' approach.

Things to do to protect your credit in a divorce:

1. Make sure all payments are made on time even through the divorce.
2. Convert any joint accounts to single accounts in your name if possible. If conversion isn't possible, immediately freeze accounts to new charges and then close the accounts. Communicate to the STBX what you're doing and why, and be reasonable, if you're still trying to be amicable about the divorce.
3. If you don't trust the STBX, consider a credit monitoring service where you can see if she's opening credit cards in your name.
4. To the degree possible, get all of the marital debt either paid off or assigned to you in the divorce decree. That way, the STBX can't ruin your credit by failing to pay on a loan or debt that is in your name but was assigned to her in the divorce decree.
5. Remove the STBX as authorized user on any cards.

2Cor521