Florida Real Estate Blog

I read a great article in the Orland Realtor January 2006 magazine about ways you can protect yourself during that very trying time when you are divorcing. Unfortunate during those times are when we feel most vulnerable and the sense that everybody is out to get your really takes hold. Guess what!

ITS TRUE, THEY ARE. ….So whata ya gonna do about it, huh.

First realize that all your debt is common and you cannot duck it. If your X is not or cannot pay bills you both will have credit scores in the 500’s. That means even if you can get another credit card the interest rate could be 23%. Ouch. Same thing for loan on a new or used car. Ouch again. Say you want a Condo to get your life started again. No Way.

Get the picture. What you do in the fist couple of months of the separation is critical if you do not want to deal the those issues. So lets list them .

1. Schedule a meeting with your X an attorney or financial advisor. Prior to the meeting pull your combined credit report (from all three reporting agencies).

Free at www.annualcreditreport.com (you only get one) or all three from the fee based provider at www.creditreport.com

2. Next they should carefully review the way debt division is written in the decree. Vague language such as Petitioner is responsible for the following indebtedness: her visa , her Citibank” creates havoc when the former couple has two visa or Citibank cards because they are all joint. Your may understand which accounts refer to you but the underwriters won’t. Please be sure to clarify everything.
3. You must realize that late payments on any bill will impact both your credit scores. I would suggest creating new individual credit cards and transferring credit balances from the joint cards. This way you can share the debt and relieve the joint cards from late charges. Once that is accomplished you should cancel the joint cards and maintain a paper trail of those canceled communications.
4. We suggest you set up joint monitoring of those joint accounts until they are closed.
5. In the decree make sure you identified bird dates when listing children. This will save the hassle of providing birth certificates at loan application in the future. Guidelines allow child support income to be included only when it will continue for the next three years. In most cases, this is until the child turns 18 or graduates from high school, whichever happens last.
6. Make sure you both have copes of your tax returns for the last three years.
7. Make sure you both have copies of the signed divorce decree and any other important documents (i.e. bankruptcies, birth certificates, account statements).
8. Create a paper trail of alimony, do not hold back any cash, deposit it all in your account each month and then withdraw it. This will support your income when filing for a new loan.
9. If you are applying for a home loan during the divorce most lenders will require a legal separation agreement, especially if there are minor children involved. Lenders want something from the courts to get an accurate picture of potential debt division, alimony, and child support payments. If you are planning on using income awarded in the agreement, you must provide a well-documented history of receiving the income for a period of 3 to 12 months, depending on the lender’s requirement.

We all have bumps in the road and the grass is not always greener on the other side of the hill. Remember what we said a while ago. I will make a commitment to you for the rest of my life. Not all of the commitments can be met but I would ask you to reconsider your commitment and try to make it work. My prayer for you goes with this blog.