An all-too-common story we hear from clients across the United States is how a divorce absolutely ruined their credit or the credit of someone they know. Most folks wouldn’t anticipate something like this happening as an outcome of the divorce because it is simply unfamiliar territory to them. They are learning as they go through the process along the way. One can’t assume that because the court ordered their ex to pay on specific accounts that they are completely out of the woods. Unfortunately, these folks learn the hard way that what the courts rule only extends so far.
The bottom line is this: divorce decrees do not supersede pre-existing contracts/obligations with your lenders. In lehman’s terms, just because the court orders one of the parties to pay a debt obligation, it doesn’t release the other spouse from liability on the account if it was originally opened as a co-signed account or joint account. Each party is still as equally liable as when the account was opened. Because of this, it’s also highly likely that the account is being reported to each person’s credit. The ramifications of these deliquent accounts could lead to years of credit issues.
So what types of things can be done to avoid these potential financial barriers? Check out today’s video! The key takeaways could save you or someone you know a lot of stress, surprises, and financial headaches down the road.
Have some questions concerning items on your credit report? Are you a lender that can’t get the loan done until your client gets their credit profile cleaned up along with a midscore increase? Contact us today for a non-obligatory, free review and we’ll be able to guide you through the process with a personalized game plan on how to get back on track!