Wednesday, April 14, 2010

Facing Divorce in tough economic times. Don't loose your Spouse and your house

Divorce is a terribly difficult situation to face. You are losing something that you once valued. There are numerous financial and legal considerations. There may be children to think of. And of course you must give some thought to your future, after the divorce.

When it comes to a divorce you have every right to think about the mortgage. If you don’t think that you’d be able to pay the mortgage on the home, then you should not try to keep the house. If you want to get out of the mortgage you may have some trouble. Every state with community property laws is slightly different. Some states are known as non community property states, where they believe that someone always owns everything; it’s just a matter of determining who.

When it comes to the lenders, they aren’t going to be happy having to rewrite the mortgage on your home. However, even if you are in the middle of the divorce, the mortgage payment still needs to be paid. In fact, it is up to the creditor to allow you to get off the mortgage or keep you on. If your wife or husband can not get the loan by themselves, then you are more than likely going to have to make sure that the mortgage is paid regardless of whether you live there are not. Late payments can really mess up someone’s credit.

If you want to get out of the divorce without the mortgage, you are going to have to think about a few things. You are going to have to either ask your spouse to buy it out, or you will have to ask them to sell. Depending on the state and your circumstances, you may have to sell the house regardless. Remember, if you put your house up for sale, you still have to pay the mortgage until the day it is signed over to a new couple or person. You are still the legal owner of the home.

If you are worried about your credit rating you should do some work or investigation before you enter the divorce process. You will need to know what credit cards that you two have and the balances on each. Not only do you have to worry about the liabilities that you two have accumulated during the marriage, you have to think about all the money that you have saved on account. You may end up having to repay your spouse from the account and pay for your credit debt.

When you file for divorce you will want to close all joint accounts. Make sure that everyone knows that it was by request, not because of other circumstances. You will want them to note that so that it shows up on your credit report and has no negative impact on your credit when you apply for new credit.

If there is any possible way to maintain civil communications with your soon-to-be ex-partner, you will both benefit from working together to protect each person’s credit profile after the divorce. You will both want to move forward with your lives. It is much easier to move forward with a clean credit report.

It's always good to consult with professionals (Accountant, Attorney, Real Estate Agent) to help navigate you through the process and mitigate any potential risk.

Written by
Mark Flanders

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