Divorce takes an emotional toll, and if you are not cautious enough, it can take a financial one as well. After divorce you have to face some abrupt changes in your financial circumstances and you have to try hard to get used to them. Instead of relying on two incomes, you are now left with one and you have to take care of all your expenses like house payment, electric bill, loan payments and credit card bills single-handedly.
This can result in unexpected financial obligations, missed payments and can eventually tarnish your credit history. In fact debt after divorce can force you to go bankrupt as well. If you are going through severe debt crisis after divorce a debt settlementplan can help you out. However, a few wise financial strategies immediately before untying the knot or right after the divorce can keep you afloat and safeguard your credit score. Read on to know more extensively about them.
- Split up your credit card accounts first. As people are more likely to miss their credit card payments, if you or your ex- spouse default on payments it can tarnish your credit ratings severly.
- Sell, if you have any joint assets or refinance the joint debts so that it remains in one person's name. If you are not staying at the martial home any more but your name is still on the mortgage, then you cab be legally held responsible for the mortgage payments. Selling assets like real estate can always offer you the cash flow which you need to clear your pending bills.
- Make sure you pay off your joint debts first. Don't rely on your former spouse to make regular payments, because if he doesn't, you will be the one who will be facing the consequences. It is best to come to a mutual agreement after diforce lawsuit, about how much of the joint debt you both are individually responsible to pay off.
- If you and your spouse hold joint accounts, close them immediately. If it's not possible, at least change them to individual accounts so that splitting up your financial obligations will be easier. Therefore if you can't afford to pay off joint debts consider a balance transfer from joint to separate account.
- Opt for a consolidation loan, either through your bank or through a credit counseling service. If you go through a credit counseling service, it will have positive impact on your credit report as it consolidating your debts is far better than having multiple accounts in collections.
- Filing bankruptcy should be you last resort. Remember, bankruptcy can give you financial fresh start but it is often followed by severe consequences. Make sure you consult a bankruptcy attorney before filing bankruptcy after divorce.
Follow the above-mentioned points to eliminate debts after divorce and save your self from future credit woes.
About the Author: This article has been written by Amy Lewis. She is associated with Oak View Law Group, a bankruptcy law firm. She writes on a wide range of financial topics like credit card debt settlement, debt management, debt consolidation, bankruptcy etc.