Credit Advice When Going Through a Divorce

 Posted on September 23, 2013 in Family Law

If you are a stay-at-home mom or dad and have not established credit in your own name, it is a good idea to start right now. If you do go through divorce or separation from your spouse you may be unable to obtain credit since she had never had credit before. It's one of those catch 22 situations. The good news is:

STAY-AT-HOME MOMS ARE FINALLY SAVED FROM BEING DENIED ACCESS TO THEIR OWN CREDIT CARDS.

One of the most important things that you can do as a stay-at-home mother who is raising a child is to obtain credit in your own name. You would think that the credit card companies and the government would be in favor of such a policy. But you could be wrong; since 2009 there has been a perfect storm of unintended consequences created by Congress.

The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) became law in 2009. The CARD Act requires that credit card companies evaluate a consumer's ability to pay before opening a new credit card account or increasing a credit limit. Under current CARD Act regulations, a card issuer generally may only consider the individual card applicant's independent income or assets.

Many stay-at-home mothers were denied credit because they have no individual income, the act prevented them from acquiring credit cards without their husbands' permission. Much has been discussed on the "war on women" this presidential debate season, and yet we haven't heard much about those rules made in Washington that actually hurt women in very real ways.

As Diane Katz reported: "In its ceaseless quest to protect us from ourselves, Congress in 2009 compelled credit card companies to confirm an applicant's 'ability to pay' before approving an account.… [T]he law is widely interpreted as prohibiting millions of stay-at-home moms (and a few dads) from obtaining credit cards of their own altogether—just like the 1950s."

Both moms and dads objected the government's attempt to "clamp down on Wall Street" or to protect ourselves from ourselves. As Pogo the cartoon character once said "e have found the enemy and he is us." Stay-at-home spouses and partners cried out for fairness when new rules approved by Congress in 2009 required credit card companies to deny credit to anyone who had no income of their own.

Finally in 2013, after more than more than 16 million stay-at-home spouses and partners were denied credit in their own names because they had not worked outside the home, Congress approved new rules, and a new provision in the card act of 2009 will allow stay-at-home spouses or partners who have access to resources that allow them to make payments on a credit card can now get their own cards.

In plain English, credit card companies are now allowed to consider income that a stay-at-home spouse shares with a spouse or partner as part of the application for a new account or increased credit limit.

As long as spouses and partners can prove they have reasonable access to household funds, they can be approved for a credit card even if they don't work outside the home. If that is you, you will need documents and records showing he your spouses or partners salary is deposited into a joint account or a bank statement proving there are monthly or regular transactions of money going into your account.

Once again after four years, problem solved.

If you are in need of financial or family law advice in Illinois, the Law Office Martoccio & Martoccio can assist you. Call 630-920-8855 for a free consultation with an experienced attorney.