Many couples go through their divorce process without realizing the financial implications that can arise. By the time their divorce is finalized, they’ve accumulated debt and lost assets. Are you going through a divorce, and feeling financially overwhelmed? Follow our guide to protect your credit before, and after, your divorce so that you can move ahead financially strong and resilent.
Take Control of Your Current Financial Accounts
The first step you should take during the divorce process is to take control of your current financial accounts. If possible, close out any joining accounts, such as:
- Checking
- Savings
- Auto loans
- Personal loans
- Mortgages
- Credit cards
It’s also important to monitor the status of your current credit report. Ask for a recent report from multiple sources, such as TransUnion, Experian and Equifax. Continue to monitor your credit as your divorce proceedings go on. Doing so will allow you to stay financially in control and minimize or altogether avoid the possibility of a debt nightmare.
Take Action With Creditors (By Sending a Certified Letter)
Notify creditors of your divorce, but do so with a certified letter that includes a confirmation of your divorce filing. Include a brief statement specifying you are not to be held liable for any additional debt that is accumulated after the date of this letter. Secure the prevention of debt accumulation by asking them to place your account on ‘inactive’ status.
Consider Home Ownership Options
How do you handle division of the biggest asset you and your spouse own—your home? If you want to keep your home, it’s important to consider the amount of debt you could take on without your partner’s financial help making the mortgage every month. If you’re willing to let go of ownership, you can sell the house, continue to co-own it, or allow your spouse to buy you out. (An experienced divorce attorney can help you navigate through the pros and cons of each, so you can make the best decision for your financial future).
If keeping your home will add an extra financial burden to your life post-divorce, you may want to think twice before fighting for ownership of your house. Alan Frisher, President of Sage Divorce Planning, LLC says, “You have to be sure you can really afford the home because it’s often more of a liability than an asset,” Frisher says. “It’s not about who will keep the home, but about who will move on from the home. And that’s simply because of the debt surrounding the house.”
Avoid Revenge Shopping or Irresponsible Spending
It’s important to remember that whether you settle in meditation or in court, you are responsible for representing the best you possible. It’s normal to have feelings of anger, retaliation and even revenge. However, overspending (booking a ticket for a weekend getaway to Mexico on your spouse’s credit card) is a bad move, as it suggests you’re spiteful—and irresponsible.
The judge could view you as someone who spent that money in revenge– so his/her spouse could accumulate that debt. Often times, overspending will backfire on the part of the spender. The best plan of action is to maintain your normal spending level so that additional debt doesn’t end up weighing on your shoulders.
Progress For Your Divorce
Choosing a divorce attorney for your divorce case is not easy, and can quickly become overwhelming. Which attorney will provide excellent legal advice and compassion? Which one will really understand you, and your struggles? Which one will help you move through the divorce process while protecting your credit?
Our divorce attorneys at Foster Law Firm in Sugarland, TX offers each client commitment and experience, and have helped a wide variety of clients throughout Fort Bend County move through their divorce smoothly, and quickly. Contact The Foster Law Firm today at (281) 494-3156 to schedule a free consultation regarding your case.