Betrayal To The Third Power / Divorce / Real Estate / Money
D-I-V-I-C-O-R-C-E, Tammy Wynette sang out years ago, spelling to keep a 4 year old from understanding! Just like the attorneys and the judge mislead the divorcing couples (?), ex's (?), losers (!).
Tammy misspelled it! It should have been B-E-T-R-A-Y-A-L, B-E-T-R-A-Y-A-L, B-E-T-R-A-Y-A-L, or betrayal to the third power! Betrayal by your spouse, betrayal by your attorney, and betrayal by the judge!
I'm a finance and real estate professional, married to the same wonderful woman for over 41 years, so I can't talk about betraying your spouse. This is about real estate and money after a divorce! This is about betrayal by the Judge and your Attorney, offen not discovered until talking to a real estate or mortgage professional!
The parties to a divorce are betrayed
by their attorneys and the judge when they allocate the bills and lie, telling one party or the other, that your spouse is responsible for some items and you're responsible for others! They spell it out, just like Tamy did in front of the kids!
They spell it out, so you think that you are no longer responsible for selected debts! The divorce judge has no authority to discharge anything other than your legal responsibility to your marriage vows.
If you were responsible for any debits before your divorce, either by signing on the account, using the credit cards, or you live in a community property state, you are still responsible to those creditors after the divorce.
The accounts are still going to show on your credit report, (Affecting your FICO scores!) until 7 years after they are paid off!
If your Ex defaults you are still responsible for those accounts, and can be sued!
If your Ex defaults your current personal credit cards are probably going to jump to thirty some percent interest!
So many divorced people believe
that because a divorce judge says their Ex is to pay a bill that they are no longer responsible! When told the truth, normally when trying to buy a house, their first response is that's not fair! Welcome to the real world! It wouldn't be fair to the creditor that lent the two of you money to now be told he can only collect from one.
If you're going through a divorce, demand that all joint accounts be refinanced into one name, revolving credit, credit cards and open ended accounts, if not paid off should be canceled. If you're on the account because you signed the original application, you can cancel the account, if your liability comes from using the account, or community property laws your spouse (EX) must cancel it.
Canceling a revolving account does not require paying it off, but rather stops further advances.
Some on going accounts can't be practically canceled or paid off. I've never seen it, but your attorney should demand that your Ex provided proof each month that accounts are being paid, such proof should be canceled checks.
If you’re giving up the house, it would seem reasonable to refuse to quit claim any property to your Ex before the entire mortgage is paid off. Once you've quit claimed your interest to your Ex, you're still liable for the mortgage, but have no way of recovering the property, if they should default. On the other hand, if you’re receiving real property get the title in your name! A divorce decree may entitle you to the property, but you’ll need a recorded deed sell or finance the property, get it and record it while you know where your ex is and the court can compel it.
Depending on your state, it is not always necessary for your spouse to have been placed on title to have an interest in your real property! Check the state you live in, the state you were married in and all states where either of you own property in!
When applying for a mortgage underwriters (the person making the final decision) will not hold payments being made by a third party against you if you can prove your ex have made the payments for at least the last year, or the life of the obligation which ever is less. (This rule also applies to your kids car loan if you co-signed.) The key is proof, insist on them paying by personal check, and don't be on the account!
Women, traditional women who took their husband's name, can under Federal law have joint accounts reported in their (new) name, this would also apply to men if joint accounts were reported only in your wife's name. Request reporting selectively, you'll have to claim all your debits when applying for credit, but you might possibly protect your FICO score.
Child support, alimony, and/or separate maintenance,
if you are receiving any or all of these payments from your Ex, you don't have to list them as income on any credit application. That is if you qualify for the loan with out the income! If you need the income to qualify you will have to prove you receive it and that it is on going. The court order will prove that the income is on going, but it will take the co-operation of your Ex and some preplanning to prove you receive it! Unless the money is collected by assignment or garnishment demand payment by personal check, and don't be on the account! When receiving such payments always pass them through your checking or savings account! Always! You must be able to prove you've received one years worth of payments or all payments since the settlement which ever is less.
Child support, alimony, and/or separate maintenance,
if you're required to pay any or all of these you must list them on any credit application!
To finance a home you must have or establish credit in your own name.
Don't forget: open a personal checking and savings account, check and change utilities, insurance, real estate and state and Federal IRS taxes (the IRS can be negotiate with.) Check and change your insurance, 401k, Kehoe, and other retirement accounts. Change you ID!
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