Houston Chronicle Article

There's a very good (and basic) article in the Houston Chronicle by Eric Tyson about separating your "emotional lives" from your "financial lives" when getting a divorce. Although short, it covers a few of the important basics that people getting a divorce should be aware of, such as:

"One of the most important exercises for spouses is to analyze their individual spending. Lower-income-earning spouses, who are typically women, face the biggest reduction in their standard of living post-divorce. A budget will help during the divorce to justify requests for alimony or child support, as well as with adjusting to a new financial life after divorce."

The full article can be read here.

Family Lawyer Directory With Audio Profiles

The Modern Woman's Divorce Guide (a website with articles and links to resources for women getting a divorce) is launching a new Family Lawyer Directory. There are other directories out there (more than a few) but this one boasts Audio Profiles, presumably to give potential clients more information about the practice. Although info in audio form doesn't necessarily mean it will be "better" or even "different", the idea sounds interesting, and may be worth a look. At the very least, the website offers lots of articles in other sections that could definitely be useful.

LINKS
Article describing the Directory in more detail.
Modern Woman's Divorce Guide website.

USAToday Article

A nice USAToday article about separating finances in a divorce. Here's a checklist they base the article on (the full article has explanations for each of the steps):

CHECKLIST FOR SEPARATING FINANCES

• Gather copies of tax returns; request credit reports.
• Close joint credit card accounts and other lines of credit.
• Pay off household expenses from joint bank accounts; close accounts, and transfer funds into individual accounts.
• Consider selling the house to get it out of both your names. Or, refinance it to put it under one person's name.
• Check overlooked assets: frequent-flier miles, club memberships, vacation pay.
• Update your will and the beneficiary forms on your life insurance and retirement accounts.
• Revise your budget. Consider hiring a financial planner if you don't already have one to do long-term planning.

The full article can be seen here

I recently ran across an article in the LA Times about the importance of closing joint accounts before a divorce is final. It is extremely important, but remember that there ARE ways to prevent this type of credit damage after a divorce if the account wasn't closed.

End joint finances in divorce
by Liz Pulliam Weston

Dear Liz: My ex got the house in our divorce settlement. I was told that he was not required to refinance, so of course the loan is still in my name as well. He makes late payments with depressing regularity. This is reflected on my credit score. Do I have any recourse?

Answer:Sadly, not much. As long as your name is on the loan, the late payments will show up on your credit reports and affect your credit scores. That will remain true until he sells the house, refinances the loan or -- heaven forbid -- loses the house to foreclosure...

click here to see full article

Checklist For Self-Protection (Divorce)

Here's a checklist of things you can (or should) do to protect yourself from credit damage once you've decided on getting a divorce (it is assumed that you and your spouse hold joint accounts together).

Immediately upon decision:

[ ] Open new checking account in your name only.

[ ] Change/open credit cards in your name only.

[ ] Open new credit card accounts in your name only.

[ ] Check all three of your credit reports for loan inquiries.

[ ] Check all three of your credit report for new mailing address(es).

[ ] Check your monthly credit statement(s) for new charges or advances.

For joint accounts that you don't plan on closing:

[ ] Confirm balances, payments, withdrawal activity, and charges.

[ ] Send a certified letter to the ‘Ex’ to confirm their agreement to pay bills on time.

[ ] Send a properly worded notification to ‘Ex’ regarding:

• [ ] Joint checking account, and/or
• [ ] Joint savings account

[ ] Confirm balance in all accounts.

[ ] Confirm change of title on properties:

• [ ] Vehicle(s)
• [ ] Real estate
• [ ] Vacation home
• [ ] 401 (K) account
• [ ] Tax account

Hopefully, this small list can provide you with the basic information you need to begin protecting yourself. Visit our website for more detailed information. You may also contact us there if you have special circumstances.

Court Decrees and Account Responsibility Part 2

The court is not directing your creditors to change the contracts that you both signed. Those contracts are not affected. The creditor is still dealing with each of you as if nothing has changed, because for the creditor with a signed contract, nothing has changed.

This is true for credit accounts (credit cards, store charge cards), any kind of loan or lease (cars, motorcycles, trucks, real estate – apartment, store front, warehouse, office space), any secured credit such as a mortgage (any loan secured by real estate), etc.

Any joint bank or credit union accounts are not affected by the decree. Both of you have access to the accounts, until someone (you) notifies the financial institution of the change.

It is not enough to tell the bank or credit union what the court has ruled. They know that the court decree is directed to you and the "Ex", not towards the financial institution.

That is why the best way to prevent credit damage due to the actions of the "Ex" – intentional or not – is for you to take control of the situation and issue the proper notification to protect yourself and your family.

Court Decrees and Account Responsiblity Part 1

The limitations of a Court decree regarding your credit:

So you have hammered out who gets what now that the two of you are going to live apart. You have probably had an attorney helping you negotiate and you've definitley had the attorney draw up all the legal documents. Finally, the court issues its judicial ruling stating something like this: you will get the house, the "Ex" will pay you enough to meet your financial obligations, and so on. Assets are allocated, it is entered into both the court record and the public record. Debts are also divided; one will pay the department store charges, the other will make the car payments, and so on.

All of this has force of law, the power of the court in all of its authority. What does that mean to your credit future?

The creditors with whom you and your "Ex" have signed contracts and agreements are not affected by the court allocation and decree. The court ruling applies only to the two of you: You and the "Ex" are still bound by the contract(s) you signed before the court ruling.

(Continued in Part 2)