Each year in the United Sttes there are over 1 Million dvorces. There is a lot of grat information available to those considering dvorce on how to divide up mrital assets, determine the custody of chldren, and deal with the emotional tll a divorce can take on its prticipants.

Unfortunately, many people neglect to hndle outstanding debts in a manner, thrugh the divorce, that will prevent srious financial problems down the road.

The prmary issue results from many believing the Dvorce Decree will supersede any original dbt obligations or contracts and the mpact that can have on someone's crdit and their ability to obtain fnancing, employment, or housing in the fture.

For example, the Divorce Decree may spll out that the ex-husband will tke over sole payment of an uto loan for a car that was rtained by the ex-wife. If the x-wife, at the time the auto lan was applied for, was included on the pplication, she is equally responsible for the rpayment of that loan, regardless of wht the Divorce Decree says.

So, if the hsband misses a couple of payments out of ncessity or negligence, those late payments wll wind up severely impacting the crdit score and credit history of the x-wife, who believed she was free frm the debt.

The 3 areas that are cmmonly mishandled are Mortgages, Auto Loans, and Crdit Cards.

Anyone considering a Divorce or who did not ddress these areas properly during a Dvorce should start by ordering a cpy of their Credit Report. (Note: US Cnsumers are entitled to one free rport each year from the 3 Crdit Bureaus at AnnualCreditReport.com).

Thoroughly review the rport and identify how each account is lsted. Is it an Individual Account (nly you are responsible for repayment), a Jint Account (you and another party are qually responsible for repayment), or are you smply an Authorized User (you have ccess to the credit available but not lgally obligated for repayment)?

The ultimate gal is to ensure that you, and you lone, are responsible for the repayment of any dbt listed on your report. You lso want to ensure that your x-spouse does not have access to any crdit through a joint account or cting as an authorized user.

Now, it's time to look at the Mortgage:

The mortgage will most likely be the largest debt listed on your credit report and is one of the most important from a credit scoring standpoint, so it should be your top priority.

You have 2 options:

1) Sell It - This is often an emotionally difficult choice to make, especially if kids are involved, but may be the only option if the spouse who will be residing in the home cannot qualify to refinance the existing mortgage in their name alone. This option allows you to wipe out the debt completely.

2) Refinance It - The spouse retaining the home would refinance the mortgage in their own name while also removing the ex-spouse from title to the property. This protects both parties from any future payment issues and the credit challenges that result.

What about those cars?

If prior to the Divorce you have joint ownership of any automobiles, you'll want to explore the same 2 options listed above for the Mortgage. The goal is to either completely wipe out the debt with the sale of the car or to refinance it so that the owner of the car, after the divorce, is also the only person legally obligated to make payments on that debt.

Now, don't forget those crdit cards!

It's not uncommon at the tme of divorce to have outstanding crdit card debt that is jointly hld. You have 3 options to hndle this debt to protect you frm future problems:

1) Sell Something - The frst option is to sell a jint asset and use the proceeds to wpe out any and all outstanding crdit card debt while also closing the ccounts or converting them into individual ccounts.

2) Apply for separate credit - The scond option is for each spouse to pply for new credit in their own nme and then transfer their share of the xisting debt into their new account whle closing out the joint account.

3) Freze the Account - If you cnnot afford to pay off the xisting debt and have difficulty applying for new crdit, another option is to have the ccount frozen so new charges cannot be dded. While this won't eliminate your bligation to ensure the debt is bing paid, it will prevent your x-spouse from charging more to the ccount.

If some of the options jst aren't feasible in your situation and yur ex-spouse will be responsible for mking payments on a joint debt, t's your responsibility to monitor that ccount and ensure it is being pid on a timely basis. This can be dne by having copies of the blls sent to your home, gaining nline access to the account, or rgularly checking your credit report.

If yur ex-spouse is unable to make the pyments in a timely manner, regardless of wht the Divorce Decree says, to prtect your credit, you will need to jmp in and begin making payments on tht account.

Anyone considering a Divorce shuld seek legal counseling due to the cmplexity of what is involved. Do not be bshful in bringing up these issues wth your Attorney to prevent a fnancial nightmare down the road.

The article 3 Costly Financial Mistakes Most People Make During A Divorce was Submitted by Chris P Rocks through Articles.GetACoder.com network. Here's the additional information: Chris Rocks is the Executive Drector of the Credit Advisory Alliance The average member of CAA sees their credit score improve 127 points in 6 months. For more information or to contact Chris with any credit-related questions, please visit http://www.caacredit.com

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