How do I protect my credit when I get divorced?

Divorce decrees do not relieve either party of joint financial responsibility. The purpose of divorce is to split off emotionally, and financially, from your ex-spouse. If you aren't careful, your ex-spouse's handling of your once-joint accounts can cause problems for you. If you had joint debts which existed before your divorce, and these accounts are not both paid off and closed, you are asking for trouble.

Most problems with joint accounts are caused by ignorance, not malicious intent. Don't think that just because your split is amicable problems can't occur. Taking adequate precautions can protect both of you.

The most typical joint accounts of greatest importance is the mortgage. This should be your first priority. It is extremely important not to walk away from a divorce with the mortgage in both of your names. Here are the possible ways to cope with joint home ownership, listed from most preferable to least:

Sell the home. Try to make sure the sale occurs before the divorce, especially if your ex is living in the house. If you have an agreement to sell (the house has not yet sold) at the time of your final divorce, and your spouse is secretly opposed to selling it, he/she can make it difficult for agents to show or list the house, potentially dragging out the sale. In the meantime, you are responsible for the mortgage payments and your credit is in jeopardy. Ideally, both of you should be residing elsewhere before it goes up for sale.

Refinance. Have your ex-spouse refinance the home in his/her own name. If he/she is to keep the house after the divorce, insist that they obtain new financing in his/her own name. A lender is going to insist on having your ex go through the formal loan process to qualify. Do not let the final divorce papers go through before the house has been through the refinancing process.

At Colorado Western, we handle these types of transactions on a daily basis. See what our customers say about our services. Not only can we structure a loan that suits the needs of all of parties to this sensitive transaction, but our staff can assist you in the sale of the home if needed.

Simply fill our Quick APP or call today at 303-786-7575 or 1-800-DENVER, CO today. We're standing by to assist you!

top