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Federal credit reform will benefit Colorado stay-at-home moms

A reform of the credit rules by the federal Consumer Financial Protection Bureau highlights the financial vulnerability of women who chose to stay at home to raise children while their spouse brought in the income. The recent rule change also serves as a good reminder of the importance of spousal support (also called alimony, and known as maintenance in Colorado) in the event of divorce.

When Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act a few years ago, one of its goals was to prevent people from piling up credit card debt they could not afford. One provision of the CARD Act provided that a credit card applicant could not get a card based on family income, when that income was not theirs individually. The purpose of the provision was mainly to prevent young people, including college students, from getting credit cards based on their parents' income.

But the law had the unintended effect of denying credit to millions of stay-at-home moms who had put their careers on hold while they raised children. In the event of a divorce, those women were especially vulnerable, because they found themselves without good credit.

Fortunately, the Consumer Financial Protection Bureau recently corrected this problem. Under a new rule issued by the CFPB, credit card issuers can now take spousal income into account if the applicant is at least 21 years of age and has reasonable access to the spouse's income.

Of course, stay-at-home moms who get divorced have another remedy available to them through the family courts. Spousal maintenance, or alimony, is ultimately intended to help a non-breadwinner spouse attain financial independence. In deciding on the amount of the monthly payment, the court considers a number of factors including how much time it will take the spouse to get the necessary training and employment to enter the work force, and the standard of living the couple enjoyed during the marriage. An experienced family law attorney can work with the spouse to make sure sufficient alimony is provided.

Source: Forbes, "Good News For Divorcing Women: Credit Reform, Reformed!," Jeff Landers, May 7, 2013

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