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Divorce myth causes financial woes, damaged credit

New Jersey couples who are ending their marriages often rely on friends and family for advice regarding the divorce process. Unfortunately, this may mean getting professional assistance too late or not at all and suffering the consequences. A number of beliefs about division of property during divorce can set one or both partners up for serious losses in the final agreement.

One of the more common assets to come up for negotiation during a divorce is the family home. Other property used as collateral to secure a loan, such as cars, are also common. In these cases, one partner may transfer ownership by removing their name from the title. However, that is not the end of it. If the sole owner now makes late payments, the other party may be held liable for fees and can suffer hits to the credit score.

This problem can be solved in a couple of ways. One is to refinance the mortgage and make that a requirement of the division of property. Another is to have the party who is remaining in the home sign an indemnification agreement.

The divorce process itself can help dispel many bad pieces of information. A couple may quickly find that disbursement of retirement accounts is possible, child support is often not formulaic and judges can use an errant spouse's misconduct in decisions about division of property. However, the learning process can end up being a source of financial instability for years to come. It can be thus advisable to have the assistance of a family law attorney throughout the process.

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