Thursday, March 19, 2009

Protecting Your Credit When Getting Divorced

If you are going through a divorce, it is essential for you to take the steps necessary to keep your credit protected. Unfortunately, many people who go through a divorce think that they don’t have to worry about credit cards and other bills if the divorce decree states the other party is responsible for paying the bills. Depending upon the types of accounts you have, however, your credit can still suffer even if your divorce papers do not hold you responsible for repayment of the bills. Therefore, it is important for you to understand the different types of accounts you and your ex may hold and how these accounts are viewed by the companies you owe.

The Individual Account

After you get married, you and your spouse may continue to hold individual accounts. If you have an individual account, you are the only one who is responsible for repaying the debt. Therefore, if you and your spouse maintain only individual accounts, you don’t have to worry about whether or not your spouse pays off the bills. In some states, however, even individual accounts are considered to be part of your “community property,” which means you are both responsible for all of the debts incurred during the marriage. Currently, community property states include:

New Mexico

Unfortunately, if you do not have a job outside of the home or if you have a low income, you may not be able to qualify for an individual account. On the other hand, if you do open up an individual account and if you handle it responsibly, you don’t have to worry about anyone else being able hurt your credit score.

The Joint Account

As the name implies, a joint account is one that you share with someone else. In order to qualify for one of these accounts, the credit history, income and financial assets of both individuals are taken into consideration. As such, both people are also responsible for repaying the debt. Therefore, even if your divorce decree requires your ex to repay the debt, the lending institution can still come after you to repay the debt and your credit score can still be hurt if your ex fails to make the necessary payments.

Since you are still responsible for repayment of the debt on joint accounts, you should take steps to protect yourself when developing the divorce decree. For example, you can request that the joint accounts be converted to individual accounts or that your ex apply for a loan in his or her name in order to pay off the joint account. This way, you don’t have to worry about whether or not the debt is getting paid off in a timely manner.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for . For more info and to order your credit report with FREE credit score please visit

Tuesday, March 10, 2009

What You Need to Know Before Co-Signing on a Loan

Are you considering helping a friend or family member with obtaining a loan? If someone has asked you to co-sign on a loan, there are several things that you need to be sure to consider. Namely, you need to be certain to fully understand the possible short and long-term effects that co-signing on someone's loan may have.

Potential Problems with Co-signing

Many people do not fully understand what they are agreeing to when they co-sign for a loan, as many mistakenly believe they are simply helping someone get a loan and nothing more. The reality is that you are just as responsible for repaying the loan as the person you are helping out. In fact, depending upon the state where the loan is taken out, the lending company may have the right to come after you for repayment on the loan before coming after the person you co-signed for.

Regardless of the state where you live, the lending company does have the right to use the same collection methods on you as it would on the person you are co-signing for. This means the company has the right to send your name to a collections agency, to garnish your wages and to send the information to the credit reporting bureaus.

Getting Stuck with Someone Else's Debt

Unfortunately, statistics show that many co-signers end up getting stuck paying on the loans they helped someone else get. According to some studies, as many as 75% of co-signers are ultimately asked to repay the money that someone else borrowed. If you think about it, this shouldn't actually come to much of a surprise. After all, a lender only asks for a co-signer when the person borrowing the money is a risky investment. If the lender is not confident in the person's ability to repay the loan, why should you be? To make matters worse, if the person you co-signed for fails to repay the debt, you are also going to be held responsible for any late fees or other costs associated with the loan. Therefore, you could potentially get stuck with a debt that is greater than what you had originally bargained for.

Keeping Yourself Protected

If you still want to help someone out by co-signing on a loan, there are a few things you should keep in mind in order to keep yourself protected. If possible, see if the lender will agree to:

Put in writing that you will only be responsible for repaying the principal on the loan if the borrower defaults, which means you won't be responsible for paying court costs, late fees, attorney fees or other expenses that could be added to the cost of repaying the loan
Notify you if any of the payments toward the loan are missed so you can keep up with payments before it the loan gets too far in default
Provide you with copies of all papers associated with the loan, such as the actual contract, any warranties and the Truth-in-Lending Disclosure Statement

Of course, you also need to be certain you are financially prepared to repay the debt if the person you are co-signing for is unable to pay. This way, if the person defaults, you can be certain your credit remains in good standing.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for . For more info and to order your credit report with FREE credit score please visit

Wednesday, March 4, 2009

Simple Tips for Investing in Real Estate

If you are someone who is interested in trying to profit from the current economic troubles, you may want to consider getting involved in real estate investment. The reality is that home prices are down around the country, which makes it the perfect time to start purchasing desirable properties so you can resell them later when the economy rebounds. Although it may require making a hefty investment now, it will certainly result in a substantial profit down the road if you make wise investment decisions.

Getting Your Feet Wet

Many people who are considering real estate investment feel quite nervous about getting started. After all, even when you are investing in what seems like a sure thing, you will have to put quite a bit of money into your investment. But, the reality is that you will never become entirely comfortable by the process until you actually get in there and start investing. Of course, before you start putting money down on real estate, you should get to know the market a little better. This way, you will be able to make the wisest decisions possible.

In order to familiarize yourself with the market, you should begin networking with other people in the real estate investment business. You can do this by attending Real Estate Investment Association meetings and by talking with other investors. You may even want to consider partnering with other investors who have been in the real estate investment business for a while. This way, you can learn from their expertise and begin to get a real feel for how real estate investment works.

You should also make it a habit to watch listings on a regular basis. MLS listings and the newspaper for that particular market are both good resources to use.

Choosing a Specialty Area

Once you start taking a closer look at the housing market, you will find that there are a variety of different types of properties available for purchase and investment. Although you can certainly dabble in all types of properties, many investors choose to start off specializing in one particular area. For example, you may choose to specialize in homes that are in foreclosure or pre-foreclosure. Or, you might focus on purchasing rehab properties or quick flips. After you become comfortable with investing in one type of property, you can easily expand your investment business to take on other types of properties as well.

Of course, before you can start investing, you will need to have the financing available. This means keeping your credit rating in good shape so you can qualify for loans. Also, it pays to establish a good working relationship with a particular lender, as this will help make it easier for you to get the loans you need to make investments in promising properties.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for . For more info and to order your credit report with FREE credit score please visit

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