Avoiding Debt after Divorce
Divorce is expensive, and with about half of all marriages ending in divorce, perhaps it is an expense we should plan and save for, like going to college or buying a home. Of course, few people enter into a marriage with such a pessimistic view, and many consider even a prenuptial agreement to be a slap in the face of romance. Therefore, when couples decide to divorce, they often find themselves facing significant financial issues while dealing with a flux of emotions.
Below are a few smart financial strategies that may be taken immediately before or after untying the knot that can make a big difference in easing the financial burden of divorce:
- Split your credit card accounts. If one or both spouses are having financial difficulties, credit card bills are often the first to go unpaid. If your ex defaults on payments that are in your name as well, your credit rating can be impacted severely, and the credit card company can come after you as well.
- If you have joint assets, such as your home and vehicles, sell or refinance any joint debts attached to these assets so that they are only in one person’s name, otherwise you can be held responsible for payments even if you no longer possess the property at issue.
- If you cannot sell all of your joint assets or refinance all of your joint debts, make paying off these debts a priority. In the best case scenario, you and your ex will be able to come to an agreement about how much of the joint debt each of you is responsible to pay.
- Also, if you come out of the divorce with debt, consolidate multiple debts through a consolidation loan in your own name, as consolidation generally has a positive effect on your credit rating.
- Close any joint accounts or change them to individual accounts as soon as possible.
We understand that you must make many difficult decisions upon divorce, and many of them may seem more important than money. However, being proactive about protecting your finances and your credit rating can make all the difference in securing the best future for you and your family.
Seek Experienced, Supportive Divorce Representation
If you are considering divorce and have questions or concerns about accompanying issues, such as dividing assets and debt, please contact Lana Hawkins, Attorney at Law, at The Hawkins Law Firm, for advice and representation from an experienced Alabama divorce attorney.