While divorces cause emotional hardship this is usually just short term. In the long run the most devastating affect a divorce can have will be on your personal finances. Not only can a divorce take a serious toll on your personal finances, but bad financial decisions made by yourself or you're soon to be ex-spouse can also ruin your credit rating.
There is however some things that you can do to save yourself this financial strain. Here are 5 ways to avoid financial problems during a divorce.
Pay your debts: Any debts that are in both names should be cleared as soon as possible. Remember when you initially signed up for these debts you did so with the trust of your spouse in mind. During a divorce you cannot have that trust anymore as you have no idea what your former spouse may do. In the case of you not being able to pay off these debts, it is necessary that you ask for them to be frozen so no more debt may occur.
Cancel Credit Cards: All of your credit cards that you have together should be paid off and cancelled immediately. These credit cards can be used by your spouse to run up huge amounts of debt, with your name attached to it, and there is nothing that you can do about it if it is a joint account. More than a fair share of divorcees has run up credit cards in an attempt to "get back" at their ex-spouse, especially during a messy divorce.
Sell Your Home: If at all possible you should sell the home you shared. This is especially true if both names are on the mortgage as your spouse can also skip out on mortgage payments, which will destroy your credit. It is often a good idea to sell your home before you start any of the divorce process as this will eliminate a potential huge dispute in the courtroom.
Register vehicles separately: If you have more than one vehicle it is best to each have one and take the other person's name off the title. Unlike a mortgage payment, where there is more leeway with the lender, a car will be repossessed if there are more than a few payments skipped. Registering a vehicle in your own name and handling the payments is the best way to avoid losing your vehicle.
Contact creditors during a hardship: While everything listed is the ideal way to handle finances, many people just don't have the money to pay for these things. During a divorce it is best to contact all of your creditors and notify them on what is going on in your life. With the recent rise in foreclosures and bankruptcies creditors are now more lenient than ever when it comes to making payments.
There is however some things that you can do to save yourself this financial strain. Here are 5 ways to avoid financial problems during a divorce.
Pay your debts: Any debts that are in both names should be cleared as soon as possible. Remember when you initially signed up for these debts you did so with the trust of your spouse in mind. During a divorce you cannot have that trust anymore as you have no idea what your former spouse may do. In the case of you not being able to pay off these debts, it is necessary that you ask for them to be frozen so no more debt may occur.
Cancel Credit Cards: All of your credit cards that you have together should be paid off and cancelled immediately. These credit cards can be used by your spouse to run up huge amounts of debt, with your name attached to it, and there is nothing that you can do about it if it is a joint account. More than a fair share of divorcees has run up credit cards in an attempt to "get back" at their ex-spouse, especially during a messy divorce.
Sell Your Home: If at all possible you should sell the home you shared. This is especially true if both names are on the mortgage as your spouse can also skip out on mortgage payments, which will destroy your credit. It is often a good idea to sell your home before you start any of the divorce process as this will eliminate a potential huge dispute in the courtroom.
Register vehicles separately: If you have more than one vehicle it is best to each have one and take the other person's name off the title. Unlike a mortgage payment, where there is more leeway with the lender, a car will be repossessed if there are more than a few payments skipped. Registering a vehicle in your own name and handling the payments is the best way to avoid losing your vehicle.
Contact creditors during a hardship: While everything listed is the ideal way to handle finances, many people just don't have the money to pay for these things. During a divorce it is best to contact all of your creditors and notify them on what is going on in your life. With the recent rise in foreclosures and bankruptcies creditors are now more lenient than ever when it comes to making payments.
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