* Finding out what you owe



* Freeze your debt

* Discuss and allocate responsibility

* Living reasonably with your debt

Finding Out What You Owe

You may already know what is owed since most couples do. However, if your spouse has been secretive about financial affairs, or if your spouse is unable to resist spending money and taking on additional debts, you may be in dark with the exact amount of debt involved. And, one of the easiest ways to find out about outstanding debt is to get a copy of your credit report. Who knows, you and your spouse may have a shared credit history that you are unaware of and, getting your credit report from all three agencies is probably a good idea.

Divorce Debt Uncovered

Jenny thought she was just wasting time ordering credit reports. But what she soon discovered came as a shock to her. You see, her husband had signed her name to six different credit card agencies, running up more than $15,500 in credit card bills in her name.

Credit Report Errors

If your report has errors, each credit-reporting agency provides detailed and specific instructions on how to correct errors.

Bad Credit Warning

If your credit is damaged, don't fall victim to a company that promises to be able to repair your credit for you. Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can't deliver. After you pay them hundreds or thousands of dollars in up-front fees, these companies do nothing to improve your credit report; many simply vanish with your money.

No one can legally remove accurate and timely negative information from a credit report. But the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act:

* You are entitled to a free copy of your credit report if you've been denied credit, insurance, or employment within the last 60 days. If your application for credit, insurance, or employment is denied because of information supplied by a credit bureau, the company you applied to must provide you with that credit bureau's name, address, and telephone number.

* You can dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing, along with any supporting documentation. Do not send them original documents.

Clearly identify each item in your report that you dispute, explain why you dispute the information, and request a reinvestigation. If a new investigation reveals an error, you may ask that a corrected version of the report be sent to anyone who received your previous report within the past six months. Job applicants can have corrected reports sent to anyone who received a report for employment purposes during the past two years.

When reinvestigation is complete, the credit bureau must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the credit bureau cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the credit bureau gives you a written notice that includes the name, address, and phone number of the provider.

You also should tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any credit bureau, it must include a notice of your dispute. In addition, if you are correct-that is, if the information is inaccurate-the information provider may not use it again.

If the reinvestigation does not resolve your dispute, have the credit bureau include your version of the dispute in your file and in future reports. Remember, there is no charge for a reinvestigation.

Freezing Debt

Once your debt is identified, your main goal is to keep it from getting worse and prohibit a barrage of new charges appearing on your statement.

An easy and quick way to do this is the time-honored adversarial divorce technique of cutting off the credit cards. But, prior to taking that step, it is important to inform your spouse The way to do it is to call the number on the back of the card. But, keep in mind; you probably won't be able to cut off your spouse without cutting off yourself.

If you and your are cooperating with each other (and remember, most spouses do), see if you can't agree on a card or two that will remain in effect for designated purposes subject to designated limits on spending.

Choices

You have two choices as you deal with the payment of your debts:

1) Agree to pay them off immediately or

2) Agree to be equally responsible for them.

Pay Off

If you have or if you have property that you can sell for cash, paying off your debts immediately is simpler, cleaner, and safer for both of you.

Equal Responsibility Through Debt Consolidation

If you both agree to be responsible for your debt, and you do not have property or assets to liquidate to satisfy the debt, an easier way would to be debt consolidation. The counselor will help you both identify the debts owed, devise a strategy for getting out from under them, negotiate, or eliminate your interest rate and perhaps be able to cut your payments by up to 70%. It's simple, sound, and reasonable! For more information visit our free debt consolidation quote area.

Living With Debt - Live More Simply

You really can do without some of those things that seemed so necessary a few months or years ago. Trade in your head-turning car for a nice sensible one, cancel the premium channels on your cable or see if they are offering other packages and bring your own salad from home instead of ordering lunch out. For realistic budget ideas visit our budget planning area.

Three Loan Pitfalls

"Risk-based pricing" Lender

This is all the rage now among lenders. They lure people in with promises of quick and easy loan approval, and they usually don't deliver what they promise. The problem is that the interest rates attached to these quick and easy loans may be sky-high, sometimes in excess of 20 percent a year. And be cautious for penalties or increased interest rates if you're late with a payment.

Temporary "low-ball" Rate

Let's be realistic here -- does it really matter what your lender charges you for the first six months, when you're going to be paying on average for several years? You need to seriously think through the total cost over the life of the loan. If you don't know what this is, insist that your lender explain it to you before you sign on the dotted line. If a lender is advertising a very low or even zero rate as an introduction, be very suspicious because you may end up paying for it later.

Home Equity Loan

Home equity loans make a great deal of sense for many purposes. Because they're secured, you can usually get a lower interest rate on them, and the interest is often tax deductible. The problem with home equity loans flows from their advantage: they're secured.

If you fall behind on an unsecured credit card, your lender has to sue you to get the money, and you can reduce or eliminate the debt in bankruptcy. If you fall behind on a home equity loan, your lender can grab your house.