Divorce doesn’t have to destroy one’s finances
One of the things that people who are preparing for divorce often forget is that ending a marriage is as much a financial breakup as it is an emotional one. Marital property will have to be split, joint accounts closed, taxes filed separately, and so on. These issues have a major impact on the finances of people going through a divorce and those who aren’t prepared for such changes could find their pocketbooks adversely affected. In fact, as Divorce Magazine points out, divorce is one of the leading causes of bankruptcy. However, with a little preparation those going through a divorce can come out of it with their finances largely intact.
Paying the mortgage
The family home presents financial challenges during a divorce in many ways. If one is staying in the family home then keeping the property may feel like a “win” at first, but that mood can quickly turn sour once it becomes clear how hard it is to pay property taxes, maintenance, and other expenses with a single income on a house that was designed for a large family. As difficult as it may be, selling the house, splitting the proceeds, and moving into a more affordable place is often the best move after a divorce.
However, even if one has agreed to move out and let the other spouse stay in the home, it is important to remember that moving out does not automatically end one’s obligation to keep up with mortgage payments. Even if both parties have agreed that the person living in the house will pay for the mortgage, the mortgage lender can still pursue payment for the mortgage from both parties if both parties’ names are still on the mortgage. As U.S. News & World Report notes, having the person who is living in the house refinance the mortgage in his or her name is usually a good idea.
Protecting one’s credit
A divorce can also cause headaches when it comes to one’s credit rating. Joint accounts are a big problem in this regard. If the couple has joint credit card accounts, for example, then it is important to get those accounts closed as soon as possible. One’s ex-spouse could drive up debt on those accounts or miss the monthly payment that he or she promised to make. Again, such a missed payment would hurt the credit ratings of both parties.
Finally, by the end of the divorce one may have significant bills that need to be paid off. While it can be tempting after a hard divorce to reward oneself with a vacation or a gift, keep in mind that living on a single income will take some adjustment. Do up a budget, work out a plan for paying down debts, and get spending under control before making any big purchases.
Going through a divorce is an emotionally and, often, financially draining process. The stress of the divorce can feel like too much to handle at times. However, a divorce attorney can provide help to those who are in such a situation. An experienced attorney can help clients understand what their legal rights and best interests are and provide peace of mind during what is often a difficult and stressful time.