Divorce and Credit – What You Need To Know

Divorce and CreditWith the hard economic times people are facing – I guess it’s not surprising that we are seeing many more people who want to purchase a home – but have a messy divorce in their recent history.

When you have a Dissolution of Marriage where one party says they will take responsibility for the account… that’s nice for the courts… but it doesn’t mean “didly-squat” (that’s right I said it!) when it comes to your credit report. 

Just because someone SAYS they are going to take over the payments on a certain account does not MEAN that it will come off of your credit report!  In Fact, unless you ACTUALLY have yourself removed from the account, you are still obligated for that debt.

Let’s think about that in terms of a mortgage.  You Quick Deed property to the other spouse, and they agree to make payments.  In NC – when you purchase a home, you sign a Deed of Trust AND a Note.  The Quick Claim Deed takes care of only ONE part of the agreement – you must still be taken off of the Note, or you are STILL Legal Obligated for the Mortgage Loan.  In order for THAT to happen – either the party who is keeping the home must pay the note off completely – or they must refinance the mortgage so that it is solely in their name.

If you are a single parent, who is looking for information on how you can purchase the next house, here’s some more information on FHA Guidelines for Single Parents.

If you are in this situation – call us!  Steve Thorne 919-649-5058  We can help you buy a house, and counsel you on the steps you need to take to protect yourself.

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