CDA Debt Division & Credit Issues in Divorce Flashcards
6 cards from real CDA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CDA Debt Division & Credit Issues in Divorce flashcards as text
What is the first recommended step for a divorcing client to protect their credit during the divorce process?
Answer: Monitor credit reports regularly and begin separating or closing all joint accounts
Monitoring credit reports and separating joint accounts early prevents the other spouse's financial behavior from negatively impacting your credit.
Under the Fair Credit Reporting Act (FCRA), how long does most negative information remain on a credit report?
Answer: 7 years from the date of the original delinquency
The FCRA mandates that most negative information, including late payments and collection accounts, remain on a credit report for 7 years.
Which strategy best helps a recently divorced individual with no individual credit history begin building credit?
Answer: Become an authorized user on a financially responsible person's account or open a secured credit card
Becoming an authorized user on a strong account or using a secured credit card are low-risk methods to begin building an individual credit history.
A client's ex-spouse was ordered to pay a joint car loan but is now 60 days late. What should the CDA advise the client to do?
Answer: Contact the lender to discuss options and consult an attorney about enforcing the decree through contempt proceedings
The client should proactively contact the lender to protect their credit and consult an attorney to pursue contempt proceedings against the non-complying ex-spouse.
When dividing credit card debt in divorce, which approach most completely eliminates joint liability risk for both parties?
Answer: Paying off and closing all joint credit card accounts before the divorce is finalized
Paying off and closing all joint accounts before the divorce is finalized is the only approach that completely eliminates joint liability.
What does 'debt-to-income ratio' measure and why is it particularly relevant to divorcing clients?
Answer: A lender's measure of monthly debt payments relative to gross monthly income, affecting post-divorce loan qualification
Debt-to-income ratio is a key lending metric that divorcing clients must manage carefully to qualify for new mortgages or car loans after asset and debt division.