Divorce can be devastating. With U.S. divorce rates hovering right around 49%, it's obvious that divorce and its far-reaching consequences touch many lives.
Add the present housing crisis into the upheaval experienced during divorce and you find many Americans presently experiencing a great need for accurate financial and legal guidance. While going through a divorce is probably the worst time to expect anyone to make sound financial decisions. Yet, that is exactly when the demand for these decisions are being made.
Certain precautions and actions should be taken during and immediately after divorce proceedings to protect yourself ... both financially and credit-wise. Otherwise you may find yourself having to do major credit-repair afterwards, just when you hope to move-on with your life.
Here are some major points to be considered, discussed, and then acted upon when divorcing, especially should you own a home with a soon-to-be ex-spouse:
- EVERY credit account you have MUST be addressed in some manner within the divorce settlement.
- Leave nothing to chance. If accounts and credit are still held jointly during the divorce process, make sure timely, consistent payments are being made.
- Keep records showing proof of your credit payments. Ask that your spouse be required to do the same.
- Be aware that creditors cannot close an account simply because you're divorcing. But they CAN close an account that is held jointly if asked to do so. That means your spouse can make that request. The creditor can then require you to apply for new credit as an individual ... based on your individual financial status.
- Have that discussion about the marital home. Will it
be sold? Who would stay in the home? Can one spouse buy out the other? - Remember: Should there be an outstanding debt on the marital home, the residing-spouse must refinance the loan to their name only, should the exiting spouse wish to be totally relinquished from the remaining debt.
- If the decision is made that one spouse will remain in the marital home, a Quit-Claim Deed must be prepared. This Deed then transfers the title and rights to the property to the remaining spouse.
- All creditors must be advised in writing of the removal of a spouse on an account. Only then will the Credit Report reflect a change.
- Seek your own legal counsel prior to taking any action.
- Consult with a professional mortgage lender before you list your marital home or before buying another property. Also remember that they are typically a great resource for credit reports and credit guidance during rough times.
- After all divorce proceedings are through, re-check your credit to make sure all requests and changes are reflected on your report. Do not assume that all has been correctly implemented.
During the stressful and disquieting times of divorce, it is vital that you protect your finances and your financial interests. That includes your credit scores. Seek-out the guidance and service that you so sorely need at this time. You will be glad that you made that effort and sought that path.
Gene Mundt, Sr. Vice President
Personal NMLS #216987
The Federal Savings Bank
1823 Centre Point Circle, Naperville, IL 60563
Skype! 630-219-1316
Divorce is certainly not something that is going to help a persons financial situation and housing situation in most cases now.
A divorce is always heart breaking. Nothing speaks further from the truth about a divorce. It ends a marriage into a business transaction.
Good morning Gene!
I have my real estate divorce certification and there are some very good points here, ones that need to be heeded. I am seeing very few divorce listings, because they are also upside down, but the biggest problem was sellers listing their homes with uneducated agents, those that did not know if a divorce has been filed with the courts, they cannot list the home for sale without the courts approval.
No approval, no sale. Sad for the buyers to find this out at the last minute.
Have a great Sunday.
It is sad that financial stress always causes stress that often ends in divorc.
Always have a reliable Realtor on your team, especially if the marital home needs a short sale.
A Great deal of my business revolves around divorces unfortunately, as many of our homes are second residences and those are usually the first marital assests to be liquidated. The idea is to make it as stressful for your clients as possible and insist on pricing it to the Market so it takes the least amount of time to sell.
When the couple have little financially, and are not in the middle of an emotional tug of war with the kids from the marriage, it seems the divorce happens quicker, easier, with less scars. Second marriage failures are pegged at 72% percent within the first two years when blending families goes anything but like the Brady Bunch portray.
Great post! I actually have several friends going through this right now. Suggested, and Reblogged!
Gene - First and foremost, LOVE MARILYN'S NEW PIC!!! OMG!!! She is getting cuter and cuter with every pic.
On another note though (and a much more serious one), having gone through an extremely nasty and expensive divorce as a 20-something, I made so many financial mistakes back then because I didn't have anyone telling me what I should have done. Boy could I have used some expert advice back then.
It took me years to recover from the financial devastation of my divorce. I was on Uncle Sam's monthly payment plan for years and had two jobs for a few years. Thank goodness I was young (late 20's, early 30's). My advice to people getting divorce: GET A GOOD LAWYER!!!
Chuck: That's true ... but it doesn't have to be permanent or even long term if the right measures are taken along the way. The damage can be lessened. Getting good advice and then following through is the key.
Loreena: You point out something very important. Marriage IS a legal and business arrangement, as well as the more romantic notions too. Couples must not lose sight of that, when they are together or as they decide to divorce. Certains steps and precautions must be advised and adhered to for the benefit of both partners. Excellent comment ...
Corinne: Sounds like you and I have a great topic and content for a seminar together???? And just as the people that make up each marriage individualize their union ... many of those same things can be said about their divorce too. Each has to be approached and guidance given in an individual manner. With your credentials you are an obvious and excellent source of the guidance that's needed when selling a marital abode. As a lender, I figure into that as well. Hopefully after reading this blog they will have some basic knowledge moving forward ... and also decide to act upon the post's plea to seek guidance.
Elite Home Sales Team: It certainly contributes, that's for sure. Every statistic seems to support that opinion. And exactly why we are seeing many divorces today ...
Dave: True .. very true in ALL transactions! I can't imagine trying to navigate buying or selling without an agent's guidance in this market ...
Mykael: Unfortunately, divorcing or not, when couples start to experience monetary troubles it is the 2nd homes or investment properties that fall by the wayside first. I can only imagine that in your market you see this all too often. Maybe a post in the making??? You certainly could speak from experience regarding that type of sale ...
Andrew: I read statistics very close to that regarding 2nd marriages ... and even higher for those attempting marriage and divorce a third time. I think after three times, I'm coming to the conclusion I'm just not cut-out for marriage ...
Andrea: I'm so sorry to hear that your friends are having rough times. If they'd need some answers or help, please don't hesitate to have them write me. I'll do what I can. Thanks for the kind words ...
Donne: I think money concerns and fear keep divorcing couples from sometimes seeking the actual and complete guidance they need. And that's so sad, as I think (especially the young ones) so need that help and guidance. They need to know that there ARE services and advocates to help them during their stressful times. Hopefully, blogs and comments such as yours get that message across.
On the lighter side .. and a much happier topic ... yep! That's grandpa's little darlin' ... all of 10 months old now. Ready to take off and walk any minute too. Can't tell you how much we enjoy her. Looking forward to her little cousin making an appearance sometime around Thanksgiving. The holidays are going to be wonderful this year! Grandpa better close a few loans ... Toys 'R Us here we come! Appreciate the sweet words, Donne ...
Gene
Great advice Gene. Sad as it is, divorce is no time to let things fall where they may. I always tell my divorcing clients that I will not be their friend, I will be their agent and everyone will know everything that is going on. No assumptions, no games, just honest advice and representation!
Divorce is such a hard time to keep an eye on the tiger and keep everything straight. Great blog.
I have not had to deal with any customers who have been going through a divorce so this very informative post, one that I will reblog and bookmark to review at a later date. Thanks for sharing.
Great post! You have provided excellent guidance to those individuals who may be faced with divorce in the near future. I am sure many will find this information extremely helpful. Thanks for sharing.
Gene you keep getting cuter and cuter! Have you had some work done?Lol!
Gene:
A divorce is such a shattering event. The two parties are probably not thinking clearly so your advice is perfect. I am bookmarking your blog so I can pass it along to any of sphere who might be considering a divorce
Gene - great advise. It is a heart breaking event but you do need to know what needs to be done.
good suff. it is always hard when you have clients that are going thought divorce.
Divorce and selling a home are two high level stress producers. Many want to stick their head in the sand. This must be overcome.
Having been down that road more than once and managing to destroy my credit each time, I can certainly relate to what you are writing! Guidance is so important when selling a hom e under any circumstances!
Divorce is most often the ugliest part of the business. As a professional Realtor i often have to meet with each side seperatley. Most often the call is from soemone who you have sold the house to or a referral from someone they know that you assisted in the past. Most formal couple leave my meeting a million tomes more relaxed having handled divorce sales for 25 years. i find communication is key
Gene, divorce can be an awkward position for the listing agent especially when the agent ends up being a referee between the two. I had a listing once where the wife did everything she could to make sure the husband wouldn't benefit form a sale. It ended up being foreclosed.
Excellent post as always Gene.
We often find that the difficult part of working with divorcing couples is that both parties do not always have the same agenda. Sometimes this is apparent early on, but occasionally, this doesn't become apparent until they are far along in the transaction process.
It was great speaking with you the other day. Your granddaughter is getting cuter by the moment.
Great article! Having been through a divorce and having to sell a marital home, etc I can personally identify with this article.
Your advice seems very comprehensive and effective for anybody who could be going through this situation.
SarahGray: I think you're wrong. You're being the BEST type of friend when you provide the guidance and caring-hand that you do while in transaction and transition. It's exactly what a good friend does ... supports and provides honest direction and answers ...
Laura: I've worked with many going through this difficult period. Most just seemed drained. Hard to see someone struggling like that ...
Thanks Kari. And if you ever DO find yourself representing someone in that position and need information ... you know you can always call me ... I'll help where I can ...
Rosalie: Why thank you! And nope ... allllll natural ...
Evelyn: Divorce can rattle even the strongest person, for sure. Glad you found the info beneficial. Shout if I can ever answer any questions or provide any help ...
Mike: I'm hoping that's exactly what the post's info does ... provide a guideline during a rough time. Sometimes just having something to follow makes it easier. Thanks for writing ...
Nick: I agree. Our clients aren't just "business" and a way to pay the bills. They're genuine, real people that we connect with. Care for. It certainly effects us too when we work with someone in this heartbreaking position. How could it not??
Sandy: It's a rough time for those going through it, no doubt. But it's exactly when they need a strong supportive agent (and lender) working with them. We're their advocates at a time when their defenses may be down a bit.
Barbara-Jo: You can speak with authority then ... and that's a great help to someone presently going through it. Think how much you can help! Perhaps there is a niche for you???
Scott: Sure sounds like you've established a great reputation for this service. Exactly the type of agent they need to work with during an emotionally demanding time. With 25 years of expertise and experience behind you, they're turning to the right person ...
Michael: Vindictivemess isn't pretty, is it? And no one wins. Not really. And yes, I can only imagine the emotions that ran through you at that point. Wish it had turned out better for all involved ...
Howard and Susan: I wonder sometimes if the couple themselves knows what their agenda is or if it's evolving as they go. It certainly would be natural, to some extent given all the turmoil. Big decisions have to be made at particularly turbulent times. Sometimes not a good mix.
And I agree. I enjoyed our talk immensely and look forward to many more in the future. See you at the Meet-Up. Thank you for the kind words about the baby ...
Bryan: Sorry to hear that you had to go through this personally. But I believe sometimes we go through these rough times so we can help others that follow us experiencing the same thing. I'm sure your special insight has proved very beneficial to those you've helped ...
Morgan: Thank you. I'm hoping that it proves useful to many ...
Gene
It's sad, but many divorce lawyers don't offer good advice with regards to real estate and divorce. You aren't truly divorced if you are still tied together by a house, mortgage or HELOC. There is a myriad of things that need to be taken care of (or at least discussed/considered) BEFORE filing the paperwork. Failure to do so can end up being incredibly messy to clean up.
Tori: I agree .. and couples need to understand that the short and quick route isn't always the most beneficial for them longterm. Preparation and follow-through are so very important ... and eliminate bigger uglier issues from arising later on. Excellent point ... thanks ...
Gene
One more piece of advice, ladies get a female lawyer or an ugly one. Can't tell you how many divorces I've seen where the lawyer is just a skirt chaser and found that specialty of law was just a happy hunting ground. Often my clients felt it was a requirement to disclose their acts to me in great detail and regret. So I partnered with one on my female agents, a former social worker to be the other half of a special divorce team and hear confessions and to breach the subject of potential lawyer abuse.
Oh man ... that's low. Just when they're most vulnerable too. I like the idea of the special team though. I'm thinking that's a very beneficial niche service for those in need. Kudos to you ... and thanks for writing ...
Gene
Gene, these are excellent points for anyone going through a divorce. I have spoken with so many people whose credit was ruined by the other party during the divorce. It derails their life for a few years until they can build it back.
Sharon