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PROTECTING YOUR CREDIT DURING DIVORCE
Your Divorce Agreement Does Not Remove Your Responsibility to Creditors
A divorce agreement may assign a debt to one spouse. However, the creditor can continue holding both spouses responsible when both names remain on the original account.
The Problems
​If your name remains connected to a mortgage, home equity account, credit card, vehicle loan, or other joint debt, your credit and borrowing ability may remain connected to your former spouse.
This can create serious consequences:
01.
Late payments may damage both spouses’ credit
02.
​Joint obligations may affect future mortgage qualification
03.
​A quitclaim deed may transfer ownership without removing mortgage responsibility
04.
Closing joint accounts may affect available credit and credit scores
05.
​Refinancing deadlines may be unrealistic
06.
The responsible spouse may be unable to qualify when the deadline arrives
07.
One spouse’s financial problems may interfere with the other spouse’s future housing plans
​Waiting until after divorce to address these problems may leave fewer solutions available.
The DMPLLC Solution
Divorce Mortgage Planning LLC identifies mortgage liability and credit risks before the divorce agreement is finalized. Our analysis considers:
​Joint and individual credit obligations
​Mortgage and home equity account liability
​Payment history and current account status
Debts that may affect future mortgage qualification
​Requirements for assumption, refinance, payoff, sale, or account closure
The financial consequences of remaining connected to joint debt
​Realistic completion deadlines
Alternative strategies if the responsible spouse cannot complete the required financing
​Financial provisions for consideration by the client’s attorney
​The purpose is to protect the client’s credit, reduce continuing financial connections, and preserve future housing and financing opportunities
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