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Almost divorced - Am I on the right track?

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Almost divorced - Am I on the right track?

I am almost divorced from my husband of 11 years (been together for 17 years). This past year has been an education and I have learned that what I don't understand at the time has had some serious repercussions for me. So I'm throwing this inquiry out there to make sure I am headed in the right direction.

Our trial was Feb 14th, 2018. I couldn't afford a lawyer. He could. The decree comes in 30 days. It's probably not going to go well for me. I naively thought things were going to end up 50/50. (lol apparently 50/50 is relative depending on whose numbers) Traditional marriage. 2kids. I was the primary caretaker. He was the primary breadwinner. I controlled the finances the 1st 5 years. He has controlled the finances the last 5. Will try not to bore you with the details. Long story short, same as many that come here for advice, credit is wrecked. (Guessing fico in 570's)

Right now I'm afraid I need to find a new place to live in next month or 2. I currently only make $17k a year. (he makes $60k) I have a budget and plan on trying to make more $$$ obviously but right now there is no way that I see that I can afford a monthly housing payment of $900-$1,200. Which is what rentals here cost and we live in a low-end neighborhood (Avg House is about $150k) 

I. There is a house in our neighborhood that was foreclosed on 9/2017. I am trying to find out what I need to do to buy it. It's not on MLS or HUD but owned by US Bank. If I'm able to buy it for $65k-$80k using FHA loan that's the only way I see being able to make a housing payment affordable for me while maintaining stability for my children. 

II. Back to my cleaning up my credit question, 
I received my 3 free credit reports yesterday. 
7  accounts 
1. Chase closed but pays as agreed  (Opened 3/2007, Closed 5/2011)
2. Paypal closed but pays as agreed
3. Citicard - closed but with 1 60 days late payment 6/2014
4. Mark One Financial - Auto Loan - that should not be there (husband bought, then rolled it into bankruptcy that I am not on)
5. Jefferson Capital - Collection for Verizon $355
6. Portfolio Recovery - Capital One - $576 - 
7. Macy's - $298 - Estimated month and year that this item will be removed 3/2018 (Does this mean it goes to CO?)

III. Are the proper steps?
A. Ask for verification of debt on Items 5, 6, 7 (the baddies?)
B. Offer PFD if they come thru with verification
C. Work to get Item 4 (auto loan) removed through showing bankruptcy that it was wrapped up into in 11/2014.
D. Send a goodwill letter on Item 2 (Citibank with 1 late payment)
E. Open 2 -3 Secured credit cards. (Discover, Capital One, and _____?) Keep $5 balance on 1, use but pay the rest to zero. (AZEO)

IV. Is there anything else I should be doing up front? 

V. Unrelated (but since the people here spend some time looking into finances I'll ask anyway) I should be receiving $30-40k (mostly from 401k retirement) as my half of marital assets. What should I do with this? My impulse is to put it away for my kids' college. (oldest of 2 is 10 so still have 8 years) but I'm not even sure what is the best investment vehicle to do that? Another 401k, 529? Take some of it and use towards real estate?

Lastly, I have a brother who works for Google, makes $400k+ and is willing to be co-signor on a mortgage. However, after reading horror stories here about co-signing, I would really like to avoid that. I really want to do this on my own. If for nothing else because the last 6 years of my life have been hell (power/control issues) when my finances got entangled with somebody else. I kinda never want my finances mixed with another again *big girl pants on*

Thanks in advance for any thoughts, info, answers, and observations.

Message 1 of 7
6 REPLIES
Established Member

Re: Almost divorced - Am I on the right track?

I've never been married or divorced, so I can't really help you out there, but I DO want to say that I think you are very much on the right track.  You seem to have thought about this logically amidst all the other junk that you are going through right now.  My hat is off to you for asking for help, and you couldn't have come to a better place.  Welcome to the forums - I hope you get the answers that you need to continue moving foward.  Keep your head up and good things will come.  

Message 2 of 7
Established Contributor

Re: Almost divorced - Am I on the right track?


@seasonswrote:

II. Back to my cleaning up my credit question, 
I received my 3 free credit reports yesterday. 
7  accounts 
1. Chase closed but pays as agreed  (Opened 3/2007, Closed 5/2011)
2. Paypal closed but pays as agreed
3. Citicard - closed but with 1 60 days late payment 6/2014
4. Mark One Financial - Auto Loan - that should not be there (husband bought, then rolled it into bankruptcy that I am not on)
5. Jefferson Capital - Collection for Verizon $355
6. Portfolio Recovery - Capital One - $576 - 
7. Macy's - $298 - Estimated month and year that this item will be removed 3/2018 (Does this mean it goes to CO?)

If your CR says item to be removed 3/2018 that means it should drop off your CR at that time due to age.   Was DOFD 7 years ago?

III. Are the proper steps?
A. Ask for verification of debt on Items 5, 6, 7 (the baddies?)

You have 30 days from the time they sent you a dunning notice to ask for verification.   When were you first contacted via us mal about these accounts?  You may very well have missed your window of opportunity for DV.


B. Offer PFD if they come thru with verification

Thats a good strategy.


C. Work to get Item 4 (auto loan) removed through showing bankruptcy that it was wrapped up into in 11/2014.

Was the auto loan a joint account, or just in your husbands name?   If it was a joint account you are still responsible for the debt since you didn't file for BK.  If it was only in your husbands name it should never have hit your CR. 


D. Send a goodwill letter on Item 2 (Citibank with 1 late payment)

Definatly give it a try.


E. Open 2 -3 Secured credit cards. (Discover, Capital One, and _____?) Keep $5 balance on 1, use but pay the rest to zero. (AZEO)

Yes.

IV. Is there anything else I should be doing up front? 

If you can qualify for a mortgage that will give you the installment loan you need. If you don't get it you should read the threads on the SSL technique.  

 

As soon as all that is in place you need to GARDEN.  If your scores are as low as you think you may have a hard time of getting any credit right now.


FICO 8 Starting Score
,
Current Scores


Quicksilver SL $300 - CL $3,300, Discover SL $11,500 - CL $13,000, Amex BCE SL $6,000 - CL $18,000, Amazon Prime Rewards SL $8,500, Citi Double Cash SL $7, 900 , Lowes (AU) CL $13,000, State Farm Bank - Auto Loan
Message 3 of 7
Frequent Contributor

Re: Almost divorced - Am I on the right track?

I. I was going to ask why you were so determined to stay in one neighborhood, but then I remembered, you have children. You want to keep continuity for them as much as possible. Hopefully you are able to do this. However, I do want to say: If you are not able to, please do not be discouraged, or get down on yourself. You will still absolutely do what's right by your family.

 

II. 4. If your husband bought it, but it was a "joint" loan, that may be why it appears on your CR. (I am going through a version of this with a CC my ex-husband opened immediately before we separated.)

IF this is your situation, try searching around. Here's one article. https://www.loan.com/car-loans/how-to-remove-a-name-from-a-car-loan.html 

 

III. E. (your numbering system went a bit wonky! :-))

Your credit cards needn't necessarily be secured. You can resort to secured if you can't get anything else, but you may be surprised that you actually qualify for some non-secured cards. Start checking pre-qual pages for Discover, Capital One, Chase, BOA, etc. See who calls your name. Don't necessarily app something the minute it comes up. You can go to the credit card forum or come back to this thread and ask for more advice on whether the card is a good option.
AZEO away after that. You'll want balance a little higher than $5 though, that might not be high enough to report to a credit bureau for some lenders. Think at least $10

 

IV. Do you have any installment loans? 

Are you eligible for NFCU? (if you are a veteran or have any military/veteran family)

You may wish to look into the Shared Secure Loan/SSL technique, which can help boost your credit scores. Unfortunately, right at this moment we are in a bit of limbo attempting to find a suitable national CU replacement for Alliant (who used to offer the SSLs) that meets all the requirements. NFCU appears to tick all the boxes, but has a high starting point I believe $3k. Keep in mind you get almost all of the money back (91%) within a week or two of beginning the loan, but then the remainder sits there for 5 years. 

You can also research the technique, but look into your own local CUs to see if they offer SSL or "credit builder loans" (same thing) as this may let you accomplish the same task, at a local level. 

 

V. Check out the bogleheads.org wiki and forum. I've just been diving into it the past couple months myself (for retirement investing). They also offer advice on other investments and products such as insurance and such, so I'm sure they'd be happy to help you figure out 1) what to do with and 2) where to put that cash.

 

As for your last note, I would 100% agree with you. Do this on your own. You absolutely can. It may, (gulp) however, mean accepting an answer you don't like at some point along the way. But you CAN make adjustments and so can your fam, especially with the attitude you have about it. Keep it going.

 

Best of luck! 

Ch7 discharged 10/2017. Pre-file FICOs high 400s.
04/2018 EX 644; EQ 670; TU 648
Message 4 of 7
Frequent Contributor

Re: Almost divorced - Am I on the right track?

A. Ask for verification of debt on Items 5, 6, 7 (the baddies?)

You have 30 days from the time they sent you a dunning notice to ask for verification.   When were you first contacted via us mal about these accounts?  You may very well have missed your window of opportunity for DV.

 

I have requested verification at least two years after the fact without a problem for me. Problem for the CCC/CA; they no longer had anything.


Message 5 of 7
Frequent Contributor

Re: Almost divorced - Am I on the right track?

Try not to touch your 401(k) unless you invest it in your future house.


Message 6 of 7
Established Member

Re: Almost divorced - Am I on the right track?

True, your 401K is not actually being liquidated is it?  If it is, can your portion remain in the 401K?


Yes, just one card - by design.
May 2018 Score: 805 (FICO 9 - Experian)
Message 7 of 7