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How does Divorce affect my Mortgage?
Divorce is difficult enough without having financial troubles heaped onto your marital troubles. To guard yourself financially in a divorce you need to act now to end joint credit, including your mortgage and credit cards.
No one can kick you out of your own house, including a spouse that wants to divorce you, but it should be noted that courts typically give the house to the parent who has the children during the week.
If your spouse wants to keep the house, insist that he or she refinance the mortgage so you're no longer responsible for the payments. If they don't refinance and also pay late, your credit will be tarnished. Plus, if you try to buy another house, your lender may count the mortgage on the old house against you. If you agree wait to sell the house until the kids leave for college, talk to your accountant about the capital gains tax consequences.
Get a full credit report from each of the three credit reporting agencies (you can do this at www.myfico.com) so you know exactly how much you each owe. Once you decide who is paying which debts, close each account and move those balances to new accounts that are not joint accounts. If you live in a community property state, you may be responsible for your spouse's debt even though it may not be a joint account.
Cancel all joint credit cards and lines of credit immediately and have your mail sent to a mailbox that locks so an angry spouse can't help themselves to any pre-approved joint accounts that come in the mail.
Write a certified letter to each of the three credit reporting agencies (www.experian.com, www.transunion.com and www.equifax.com) and let them know you are divorced or separated.
In community property states, you each keep what you brought into the marriage, things you inherit, court awards and pensions earned before you married, so you will need to gather any documents that prove what you had before you wed.
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