How to divide total loans after a divorce in America
'04.12.2017'
Source: Money talk news
Surviving a divorce is always difficult, but in order for the situation not to worsen with problems with total debts on a loan, you need to take time to resolve this issue, writes Money talk news.
To get out of a divorce with good credit, make sure all bills are paid on time, says loan expert Beverly Harzog. It will be easier if you both work and pay the dues. And if your spouse is behind in payment, your credit history can be ruined. Large credit agencies - Equifax, Experian and TransUnion - may increase the interest rates you pay on loans after a divorce, which will lead to refusal to issue credit cards.
What you can do to split loans:
Close general accounts as soon as possible
One way to protect your loan is to pay off and close the accounts that you and your ex owned. As long as you maintain joint credit accounts, you remain financially tied. If you are unable to pay off the common debts before your divorce, the responsibility for them can be divided in your divorce agreement. There is also danger if the spouse is an authorized user of your credit card. Experts have repeatedly encountered situations when one of them collected a debt on the card, and the other paid, because he bears legal responsibility. The surest and safest solution is to immediately remove the spouse's authorization upon request to the bank that issued the card.
Try not to pay more than your share.
When paying off joint debts, it is important to make sure that you do not assume a greater share of financial responsibility than is necessary. It is important to know that a divorce agreement may require more than half the amount owed from your spouse. And if you pay everything before the divorce, you will not be able to get this benefit. If you can not immediately pay off debts, freeze them, then the former will not be able to collect additional obligations that will fall on you. Sometimes it makes sense to pay an overdue account to protect your credit rating, such cases are better discussed with a divorce lawyer.
Start creating a credit history on your behalf
As soon as you can, it’s worth creating an independent credit history by opening bank accounts and credit cards on your own behalf. In modern society, without loans and their repayment can not always do. Lenders use ratings to decide if you can give you a mortgage or a car loan. Insurance take into account these points to determine the payment for insurance. The better your credit history, the higher your score will be. As a rule, it is good to score above 740. Keep your credit history well and responsibly - do not take more obligations than you can repay on time. Perform monthly payments and do not save debts.
Monitor credit accounts and reports
After a divorce, when you begin to build your credit history, there is a chance that your credit report will be closed due to overdue payments of the former. To prevent this from happening, review your credit accounts and reports online. Do it every day to not miss anything. Equifax, Experian and TransUnion must provide free copies of credit reports each year. You can find out more on the site. AnnualCreditReport.com.
Track your expenses
Experts say many people go into debt after divorce. Someone makes senseless purchases in order to console themselves and somehow please themselves, using credit cards for this. To build a good credit rating and not run into debt, experts recommend not using more than 10% of your credit limit on a single account, at least not long after the divorce.
