GAP Financial Services

Facts:

A married couple may think
that they have one credit file but that is incorrect.  Each individual has their own credit file
containing information about accounts or credit events that are linked to their
name.  Many married couples combine their
income when applying for credit.  The
creditor then considers each individual to be 100% liable for the contract they
agreed to.  In these situations, the
credit reference will show up on both individual files.

Who is Responsible?

If two people signed on the
credit transaction, both are 100% liable for the debt until the balance has
been paid in full.  The fact that the
Judge may award that debt to one person or the other does not change the fact
that both are 100% liable.  If payments
are missed, the late payments will show up on both credit reports.

What if I did not sign for the debt,
can I still be held liable?

Wisconsinhas a marital property law.  This law makes each spouse liable for debt
that is taken out in the interest of his or her marriage or family.  It is possible for one person in the marriage to take out the debt, yet both parties will be held responsible for its repayment.  When a transaction is taken
out by only one person, the creditor is supposed to send out a marital property
letter to the non-signing spouse, advising them that they will be held liable
for the debt.  Issuance of that letter
may make the non-signing spouse liable for a debt that they did not agree
to.  This can be a very sticky situation
and it is best to consult with your attorney about any debts that you did not
knowingly agree to.

Action:

How do I protect my finances before the
divorce?

Most marriages have one
partner who takes responsibility for the finances.  Although this can be convenient, it can place
the other partner at a disadvantage upon separation or divorce.

1)    You need to be aware of all the accounts that you are
responsible for including:  bank
accounts, mortgages, credit cards, utility and medical bills.

2)    Dissolve all joint accounts as soon as you can.  Cancel your accounts together legally.  Start with your joint checking and savings
accounts.  If you have both signed on the
car loan you may have to refinance the loan to remove your spouse’s name.  Any bills that you pay together, such as
utilities, put in just one name.  As for
credit cards, try to work with the credit card company to transfer 50% of the
debt on to two separate cards.

3)    Sell the house immediately unless one spouse is able
to refinance the mortgage in their name alone.
If you do not sell, and one spouse takes over the mortgage, later
defaulting, the foreclosure will show up on both credit files.  This will affect the ability of both spouses
to obtain a mortgage in their own name.
If you sell right away, you can split the profits and walk away without
any further liability.

4)    Document everything that you do.  If questions arise later, you will have the
proof that you need to help rectify the problem.

5)    Review your credit file and credit scores.  Make sure that all of the information that is
being reported about you is correct.
Take action to clear up any delinquent accounts as quickly as
possible.  www.annualcreditreport.com
provides a free credit report from each of the three credit reporting agencies.

6)    Notify your doctor’s office that you are no longer
liable for your spouse’s medical debts.

Divorce is a stressful
time.  If you would like help in creating
a budget or making sense of your credit report give us a call.  Many times, we were not taught how to handle
our money at school or at home.  It is
never too late to start to organize your finances.  Education is a big part of what we do at GAP
Financial Services.  You can reach us at
920-897-4130.

The main
goal of estate planning is to safeguard your loved ones after you’re gone, and
to protect yourself if you’re incapacitated during your lifetime.  There are 5 legal documents that you will
need:

1)     A Will.  This document explains how you want your
assets distributed after you die.  If you
don’t have one, State law makes the decision for you.  You will also name a guardian for your children.  For more information go to:  www.mystatewill.com

2)     A Durable Power of Attorney.  This document names
a trusted person or institution to handle your finances if you are
incapacitated.  If you were in the
hospital, the person you choose has legal authority to write checks on your bank
accounts, etc.  You can revoke this
document at any time.  If you do not, it
is valid until you die.  A power of
attorney that isn’t durable expires if you become legally incompetent – exactly
when you want it to work.

3)     A Health Care Proxy.  This document gives someone you
trust the legal right to make medical decisions on your behalf if you can’t
speak for yourself.

4)     A Living Will.  This describes the medical treatments you
want and don’t want if you are unable to make decisions.  An example would be that you may choose to
not be kept alive by artificial means.

5)     Copies of Beneficiary Designations.  These are
your records of any retirement accounts and the forms you filed with your IRA
provider and the administrator of your employer sponsored retirement plans such
as 401 (k), 403 (b) and 457s.  These
forms are very important – They – NOT
YOUR WILL – determine who gets your accounts when you die.  If you don’t have copies, ask your account
custodian or plan administrator to send you a copy.

6)     A Trust.  This is something you may or may not need –
depending on circumstances.  Different
types of trusts can help you leave money to a minor, disabled child, or
grandchild, or to provide a lifetime income to a surviving spouse or children
from a prior marriage.

Estate
planning documents are typically prepared as a package by an attorney who
specializes in estate law.  Check the
Martindale-Hubble Law Directory at www.martindale.com
– it covers all legal specialties and provides basic information to attorneys’
websites.  You can also ask friends or
family for recommendations in searching for an attorney.  Lastly, you can contact your local bar
association for referrals.

How to Prevent ID Theft

One way to protect your identity is to check your credit report periodically.  It is free to pull a credit report – you can get 1 free report from each of the 3 credit reporting agencies once during each 12 month period.  Make sure you use www.Annualcreditreport.com  or call (877) 322-8228.  Some websites advertise a free credit report but then try to sell you a monthly credit monitoring service.  This website will not charge you any fee.  Look over the credit report and make sure there are no errors.   Stagger when you pull the credit report so that you can monitor your report throughout the year. 

Securing your mailbox is another way to protect your identity.  Do not leave outgoing mail in the mailbox that someone could steal and get your personal information.  Make sure you shred any mail you have received that has your name and any identifying information on it.  Having a mailbox that is locked is another way to protect your mail.  Get your mail as soon as possible each day – don’t let it sit in the box all day or over the weekend.  Ask a neighbor to bring in your mail if you will be gone for the day or weekend.

Don’t carry your social security card with you.  Protect your bank account numbers and ATM receipts – often times ATM receipts are dropped at the bank and laying on the ground for thieves to pick up.  If someone does get a hold of your credit card or checks contact all three credit bureaus and ask them to issue a fraud alert.  Contact the local police department, Social Security Administration, and all creditors you have accounts with. 

Credit Bureaus:

Equifax:  800-525-6285

Experian:  888-397-3742

Transunion:  800-680-7289

SSA Fraud Hotline:  800-269-0271

You can ask the credit reporting agencies to flag your account and you can add a victim’s statement saying that your ID was stolen and ask that they call you to verify any credit applications.  Make sure to check your credit report and look for items you don’t recognize.  Notify the Federal Trade Commission which keeps a database of identity theft:  (888) FTC-Help, FTC, CRC-49, Washington D.C. 20580.

How to Prevent Impulse Buying

Have you made any large purchases lately?  If so, did you think about it, save for it, research it, and THEN make your purchase?  Or, like many people, did you see something in a store that you thought would be nice to have and buy it on the spot without any serious consideration?    Buying on impulse can wreak havoc on your budget.  You say you don’t have a budget?  Well that is your first step to preventing impulse buying!

Having a budget, or spending plan, can let you see where your money is going and can help you plan for those purchases, large or small.  Having a plan insures that you are not stressed out about how you are going to pay for the item after the initial thrill of the purchase is gone. 

You might want to set some rules for yourself.  If a purchase is over ($ ?) amount, you will check the prices from at least two other merchants to insure that you are getting the best deal before making the purchase.   You may also want to set a dollar limit amount for larger purchases, let us say $300.00.  Your rule might be if you want to purchase an item over $300.00, you must not only shop for prices at least two other merchants but you must also wait at least 48 hours before making the purchase.  If you are not wiling to follow your rules, then you know that the purchase is an Impulse Purchase.  Once you walk away from the item, the idea of purchasing it may have lost its appeal.  

If your purchase requires financing, you should always consider the cost of your purchase including finance charges.  You should also prove to yourself that you could afford the payments, by saving an amount equal to your new monthly payment for at least two months.  If you cannot save an amount equal to your new payment, what makes you think that you can afford to make long-term payments for the item you want to purchase?

The best thing that you can do is plan ahead for your purchases and after you have shopped around for the item, sleep on it to make sure the item is affordable and then  CHOOSE an item that is worthy of spending your money on.