Your Credit Score after Legal Advice

An attorney can be a life saver and at the same time they can cause havoc. I recently received a call today from someone wanting to buy a house. This individual, we will call him Bob, was advised by a judge back in 2009 to stop all payments on a house to force a short sale. This was all the result of a divorce. This may sound crazy, but the soon to be ex-wife did not want any part of the obligations involved with the property during this divorce. So the Judge forced a court ordered short sale on the home.

Bob was advised by the attorney that this process would not affect his credit. Well the part they forgot to mention was the creditor does not care what that court orders states. Bob is still obligated to pay that mortgage until the house is sold or refinanced out of his name.

I have also received calls from past clients that thought a divorce decree protected their credit report from previous obligations. They were told this information by the attorney representing them. For example, the divorce decree stated that Bob’s wife was responsible for the car note and some credit cards. A few months later Bob get a call from a collection company that he owes them money for a car that was repossessed. To Bobs surprise even though the divorce decree stated his ex-wife was responsible for the car note; his credit report now shows 90 day late payments. Bob is now getting hounded by collections companies.

Attorney’s not giving good advice when it comes to credit has been a huge problem. I have come to the conclusion that divorce attorneys know nothing about credit laws.

So if divorce is on the horizon, anything that is awarded to your spouse, make sure that debt is out of your legal name. A good attorney will force the other party that is responsible for the obligations to get all those obligations out of your legal name. This is really the only legal way to get your credit off the hook.

Remember, a divorce decree or court order does not remove your social security number from a creditor’s database. As long as your social is attached to any particular obligation, you are responsible for that obligation regardless of what an attorney says.

Author: Mike Clover

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