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  PROTECTING YOUR CREDIT IN ANTICIPATION OF DIVORCE

 

QUESTION:   I am currently getting ready to file for divorce.  A friend of mine was recently divorced and his ex-spouse wiped out his credit.  Once she discovered that he filed for divorce she maxed out all of the credit cards.  The judge ordered her to pay the debts, the car payment on the car she drives, and the mortgage payment on the house she lives in.  She refuses to meet her obligations under the divorce decree, yet the creditors are still after my buddy.  What’s the story Judge?  Is there any way to protect my perfect credit?

 

ANSWER:  If you are contemplating a divorce you are wise to look closely at issues involving credit.  There are two different types of credit accounts: individual and joint.  An individual account is one based only on your income and you alone are responsible for paying off the debt on the account.  A joint account considers the income of both spouses, and both spouses are responsible for paying off the entire account debt.  If you have designated your spouse as an “Authorized User” on your account or you are an “Authorized User” on your spouses account, debts can be reported in your name.

 

 

QUESTION:  How long can I be held liable for my ex-spouses debts?

 

 

 

ANSWER:  As long as there is a balance on a joint account or accounts where an authorized user has been designated you are liable.  You will also be liable for any future charges by your spouse on an open account.  If your spouse gets behind on an account on which you are an authorized user, her debts can be reported on your credit account.

 

 

 

QUESTION:  What can I do to protect my credit?

 

ANSWER:  Make sure you pay off the balance on your accounts or confirm that your spouse has.  Write to your creditors by certified mail return receipt requested and ask the creditors to close any joint accounts, and remove your spouse or former spouse from any accounts the spouse was authorized to use.  On any accounts you have been named an authorized user have your designation rescinded.

 

 

 

QUESTION:  Can I make creditors remove my name from a mortgage or car loan?

 

 

 

ANSWER:  Creditors generally will not remove your name from a loan or mortgage until the debt has been satisfied.  Creditors may allow the loan to be refinanced in the name of one of the parties if they can qualify for the new credit on their own.

 

QUESTION:  What if the judge orders my ex-spouse to pay some of our joint debts and she doesn’t?     

 

ANSWER:   The creditors are not parties to your divorce and are in no way bound by orders the judge makes between you and your ex-spouse.  You are still liable to your creditors even if your ex-spouse violates the court order.  Your recourse is to pay the debts and get a judgment against your ex-spouse for  reimbursement.

  We can help you to repair your Credit History

 It only takes 35-45 days to receive responses from the credit reporting agencies after we contact them! It’s very important that you continue paying your bills in a timely manner, that you do not contact the credit reporting agencies, and that you don’t apply for any type of credit during the dispute process.

We order your credit reports for you, at no cost to you. Within 7-10 days, you’ll begin receiving credit reports from CSC/Equifax, TransUnion, and Experian. It is critical that you deliver all of your credit reports (and additional correspondence) to us… immediately upon receipt.

Question: Will faxed credit reports be accepted? Can I bring or send credit reports from the internet or other vendors?

No, we cannot accept faxed credit reports. We need original documents from the credit reporting agencies, because most of the credit reports from the internet are inaccurate or incomplete. We prefer to obtain your credit reports directly from the credit reporting agencies or our approved vendor(s).

How do I know your service is working?

Investigation results will arrive in the mail at your home (from each credit reporting agency) within 30-45 days. The investigation results will show each of your disputed accounts as one of the following: “deleted”, “updated”, “remains”, “new information below”, or “not found”.

How can you do this legally and according to the law?

The Fair Credit Reporting Act (FCRA) is a federal law designed to protect you from being “slandered” by creditors, collectors, and credit reporting agencies. According to the law, a disputed credit account must be accurate, complete, and verifiable for it to remain on your credit report.  This allows you to legally challenge information on the basis of “completeness and accuracy”. Many creditors simply don’t respond within the first 30 days (allowed by law), causing the deletion of your disputed account.

Can a negative credit account be deleted?

Yes. All inaccurate, incomplete or unverifiable accounts must be removed or updated. We have removed repossessions, tax liens, bankruptcies, judgments, foreclosures, late payments, charge offs, collection accounts, and many other negative credit items. However, we cannot & do not guarantee the deletion of any negative account(s) in whole or in part.

Question: Where can I obtain a copy of the Fair Credit Reporting Act?

Answer: The Fair Credit Reporting Act is available at the Federal Trade Commission’s website located at http://www.ftc.gov/os/statutes/fcrajump.htm   or we can provide you with a copy upon your request.

Question: Do I have to  pay off negative accounts to repair my credit??

Of course, paying off the negative balances owed to creditors is always a step closer toward better credit.  Unfortunately, in the short term, the credit reporting system utilized by each of the major credit reporting agencies do not recognize your efforts. When you pay an old debt, the negative credit listing (judgment, tax lien, charge off, collection account, etc.) doesn’t disappear.  In fact, it may reactivate the 7-year reporting “clock” of that negative listing, thereby keeping it on your credit report for an additional seven (7) years, which may temporarily lower your credit scores.

Question: Does it matter which state I live in?

Answer: No, it doesn’t matter which state you live in. The Fair Credit Reporting Act is a federal law, regulates the credit reporting agencies, and applies to the residents of all fifty (50) states and/or anyone with a Social Security number.

Question: What does Section 611 of the Fair Credit Reporting Act state?

Answer: Section 611 procedure in case of disputed accuracy(5) Treatment of inaccurate or unverifiable information.(A) In general, after any reinvestigation under paragraph(1) of any information disputed by a customer, if an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumers file or modify that item of information, as appropriate, based on the results of the reinvestigation.(taken from the October 1, 1997 edition of the Fair Credit Reporting Act)

Nadia Hilkert 808 343 1113

Mortgage Loan Consultant

nhilkert@alohalendingservices.com