How To Prevent Divorce From Hurting Your Credit

Posted on January 24, 2008 by Kansas City Divorce Attorney Mark Wortman

 

The following post recently appeared in the New York Divorce Report.  This article addresses one of the most important issues in a divorce, the division of marital debts.  If parties have joint debt, whether it is a credit card, loan, auto loan, mortgage, or other debt, a divorce decree cannot change the relationship between the parties and their creditors.  While a court can order a party to assume a debt and hold the other party harmless, if that party defaults, then the creditor can collect from either party on the debt.  This means that the party not responsible for the debt may have to pay the debt or risk credit damage, should the responsible party default.  The injured party's recourse is to sue under the divorce decree and attempt to recoup their losses from the divorce court.  This causes financial strain, credit problems, and emotional stress in having to continue to deal with the ex spouse and the court. 

The best way to avoid these problems is to require the party responsible for the debt to refinance it into their name, have the creditor release the other party (if credit permits), transfer the debt, or pay the debts with marital assets before the dissolution.  The New York Divorce Report post is set forth below

Your credit rating could be hurt by divorce. As part of divorce, you distribute not only your assets, but your debts and obligations as well.

An in-artfully drawn marital agreement may provide that one spouse will assume the liability for a joint debt. However, an agreement apportioning joint liability between you and your spouse is not binding on the creditor. The creditor can attempt to collect the debt from either or both parties. As pointed out in a Fox Business article, “The mistaken assumption that you're off the hook for financial obligations can result in a series of missed payments that may trash your credit score for years.”

A well written agreement would provide that the debt is fully paid or transferred into the name of the spouse who is going to be responsible for paying it.

The Fox article does provide some useful information about protecting your credit rating:.

Begin by converting your credit card accounts. People most often miss payments on this type of debt, rather than the loans that keep a roof over their head and wheels under their feet.

Next, work on refinancing your mortgage and your car loan. Granted, this is going to be more difficult, because the bank will want just one person to accept the loan in his or her name -- which may not be possible if that person's salary isn't enough to qualify for the loan. In cases like these, it might be easier to sell the car or the house, split the money and move on. That way, you're guaranteed not to have credit damages caused by a vengeful ex-spouse.

"Remember that when you're getting divorced from your spouse, you're also divorcing yourself from emotional attachment to assets," Ulzheimer said.
You would also be wise to opt out of receiving pre-screened offers for credit or insurance. A spiteful ex-wife or ex-husband may be tempted to apply for a loan in your name just to ruin your credit. Go to the consumer credit reporting industry's official Web site for details. Visit the Web site.

Finally, start planning for all this at least six months to a year before you file, or as early as possible before the divorce gets ugly. Once any problems begin, you and your embittered other half will have a hard time thinking logically. If this seems like a lot of work at the front end of your separation, remember that it will save you up to 10 years of credit-related headaches in the aftermath

Source for Post: New York Divorce Report
Tags: , , ,

Case Law Update: Grandparent Visitation Cannot Be Granted By A Probate Judge

Posted on January 21, 2008 by Kansas City Divorce Attorney Mark Wortman

In the Matter of D.C.O. and A.D.O., Bill Hitt and Brenda Hitt, Appellants v. Mark S. Odom, Respondent, No. 28163 (Mo. App. S.D., December 7, 2007), Parrish, P.J.
  The father of two minor children filed a motion to modify a prior judgment granting grandparent visitation. The judgment from which he sought modification had been entered in 2001 in the Probate Division of the Circuit Court of Dunklin County. That litigation had been based on a two-count petition brought by said grandparents. Count I was for guardianship of the children, and count II was for grandparent visitation. Prior to the entry of judgment in 2001, count I was dismissed and the parties entered into a stipulation that resulted in the grandparents receiving visitation, pursuant to the judgment.
  The trial court in the modification action determined that the original court had no jurisdiction to enter the judgment for grandparent visitation upon the dismissal of count I of the action for guardianship. The trial court declared the judgment void ab initio. The grandparents appealed.
  Held: Affirmed.
  A probate court is limited in the exercise of jurisdiction to those granted by applicable statute. “Grandparent visitation rights are addressed by § 452.402 which relates to custody issues in dissolution of marriage and other related cases that a probate division does not hear.”
“Upon dismissal of Count I, there was no probate matter remaining.” Therefore, the judgment was void at its inception.
  “If there is now an issue regarding visitation rights, it can be pursued by an action separate and apart from the one that produced this appeal.”

Source For Post: MIssouri Bar

Tags: ,

Case Law Update: Post-Judgment Procedures Pitfall

Posted on January 21, 2008 by Kansas City Divorce Attorney Mark Wortman

Susan J. Southard, Petitioner/Respondent v. James A. Southard, Respondent/Appellant, No. 89217 (Mo. App. E.D., November 27, 2007), Romines, J.
  This was an action for modification heard by a family court commissioner. The commissioner's findings and recommendations were adopted and the original judgment was modified as to custody. Father filed a motion for de novo rehearing. The motion was denied. He appealed. One of the claims made in father's motion was that the trial court's judgment was deficient in making statutorily required findings for modification of custody.
  Held: Affirmed.
  By failing to file a motion to amend the judgment to make statutorily required findings, father waived his right to make that argument on appeal. Rule 78.07(c).
“The fact that Rule 129 exists does not mean that a family court judge is confined to ordering relief found in Rule 129 alone. While Rule 129 does govern procedures in front of commissioners and supersedes all inconsistent rules by its own terms, see Rule 129.02, it does not preclude the application of rules with which it is not inconsistent.”
  “Rule 78.07(c) is clear that a motion to amend must be filed in order to preserve error in all cases in which failure to make statutorily required findings is raised. A party simply must file both motions if he wants a rehearing in front of a circuit judge but wishes to preserve his claims of error for appeal in the event that motion for rehearing is denied.”
  It did not matter that the post-judgment motion filed by father, and designated as a motion for rehearing, contained all of his claims of error, including those related to Rule 78.07(c) deficiencies. Dual motions were required.

Source for Post:  Missouri Bar Courts Bulletin

Tags:

Recent Case: Amount Due for Overpaid Child Support Was Not Proved

Posted on January 14, 2008 by Kansas City Divorce Attorney Mark Wortman
Administrative child support order was void because of prior judicial order. Court of Appeals denies motion to supplement record with evidence, of non-custodial parent's liability for child support, not received in Circuit Court. But non-custodial parent did not prove Family Support Division's liability for over-collected amounts because he did not show how much Family Support Division improperly received.
Tony Ward, Respondent, v. Janel Luck, As Director Family Support Division, Missouri Department of Social Services, Appellant. Missouri Court of Appeals Eastern District
Tags:

How to Keep Divorce From Having Long Lasting Effects on Children

Posted on January 2, 2008 by Kansas City Divorce Attorney Mark Wortman

Yearly more than 1 million children experience the divorce of their parents. The process and trauma these children experience will normally begin long before there is an actual divorce. It will begin with parental disagreements, anger and continue to worsen throughout the divorce process and can often last for many years after the divorce is final.

You can’t take your child’s discomfort away but there are things you can do that will lessen the long lasting effects your divorce will have.

Here's How:

  1. Utilize Age Appropriate Therapy.It is important to have a third party who can be objective and whose only concern is listening to and putting at ease, the feelings of the child. A child will feel more comfortable expressing anger or sadness to a third party such as a therapist.
  2. Put Their Feelings First.Stay focused on your children’s needs in spite of your anger, grief and discomfort in the divorce process. Don’t allow your own feelings to get in the way of meeting your child’s needs. Be willing to listen to your child even if what they say is hurtful.
  3. Pay Attention to Their Moods.Understanding why your child is acting out will help you be more tolerant and aware of their needs. Take notice of when the child may be feeling especially sad or angry. Take extra time to do things with the child that will distract him / her from the problems in the family.
  4. Watch for any Psychosomatic Symptoms. Some children develop migraines or tummy aches. They internalize their pain instead of externalizing it and acting out. If your child begins to complain of aches and pains have them checked out by a doctor to make sure it is nothing serious.
  5. Continue to be a Parent. Stay involved in your child’s life. The best way to ward off any long lasting effects is to see your child often, plan activities with your child and stay highly visible in your child’s life. It takes two full time parents to help a child get through the divorce process in a healthy manner.

Source for Post: Cathy Meyer's Divorce Support Blog at about.com

Tags: