Life and Credit after Divorce

Couples who decide to divorce generally face emotional challenges in all aspects of their lives. Managing your financial issues responsibly can help address one major concern and make separation and divorce less painful.

While these may be challenging times, a marriage breakup doesn't have to break the bank. Consumer Credit Counseling Services (CCCS) agencies like ours can assist newly separated or divorced individuals in staying on a sound financial path through a budget counseling session with a credit counselor certified by the National Foundation for Credit Counseling.

You Aren't Alone

According to the U.S. Census Bureau, 50 percent of all marriages will end in divorce within 15 years. Research shows most couples, even if they start out with separate checking accounts, consumer credit and personal savings accounts eventually wind up combining their money. Personal debts become "family" debts. So it comes as no surprise that financial issues usually top the list of concerns of divorcing couples.

Because divorce is common, Consumer Credit Counseling Services (CCCS) agencies like ours have plenty of experience in helping people through post-marital financial problems. Planning your financial future prior to and during divorce proceedings is essential in avoiding monetary crises, such as a home foreclosure or even bankruptcy.

Make a Plan and Protect Your Credit

While consumers generally share similar financial concerns, special circumstances vary dramatically among divorcing couples. It's important to formulate a plan early on, and to enlist help from reputable legal and financial professionals. For instance:

• Will you be paying the mortgage on a single income?
• How will joint credit card debt be resolved?
• How will your investment portfolio, i.e., 401K, be divided?

When divorce is inevitable, many Consumer Credit Counseling Services (CCCS) agencies recommend that you:

• Close all joint accounts. Otherwise, you will need a disclaimer or court order to append your creditor agreements. (Divorce papers do not supersede the original creditor agreement.)
• Open personal accounts, in your name only.
• Be willing to sell any or all assets - including real estate - to settle joint debts. (If you are still living in the same house, it may be worthwhile to consider moving into a smaller, more affordable living space.)
• Create a list of assets that you feel you must keep, but be prepared to compromise.

Get Personalized Help

If divorce has made it difficult for you to get the bills paid, you may want to seek the advice of a reputable Consumer Credit Counseling Service like our CCCS agency or other accredited professional. But do your homework. Whenever you seek professional help, it is a good idea to check with the Better Business Bureau to ensure you are dealing with a reputable agency or firm. This is particularly important on personal financial matters.

Divorce can be emotionally draining. To keep a level head and avoid severe depression, don't be afraid to seek other types of counseling than consumer credit counseling services. Call your state or county mental health department and ask for a referral to a professional therapist. A sound mental state is critical to making wise decisions, especially financial ones that will affect your monetary well being for years.

Divorce is never easy. But with the right planning and assistance, you may be able to minimize its emotional and financial strain on you.