Achieving financial stability after divorce

June 22, 2013 (Press-News.org) Achieving financial stability after divorce

Article provided by Law Offices of James V. Sansone
Visit us at http://www.jamessansonelaw.com

Planning for life after divorce can seem daunting. Many cannot think of how they will disentangle their lives from their spouses' and start over on their own. With careful planning, however, people can make sure that their financial lives are secure after divorce.

Budgeting

One of the most important things a person can do to set themselves on a smoother financial course after divorce is to create a budget for post-divorce life. People should determine what their income and living expenses will be after the divorce, as well as the assets and debts they will have. Budgeting can help people realize that they may need to retrench in certain areas after divorce in order to live within their means.

Saving is an important part of any budget. People may want to consult financial planners in order to develop comprehensive financial plans for both short and long-term goals, including the recommended six months' worth of savings for emergencies and retirement savings.

Having a comprehensive financial plan may aid people during divorce property settlement negotiations. People will have a more complete idea about their financial situation, which may influence their requests for spousal support or the choice of assets they want to keep. For example, people may realize that they cannot afford to maintain the marital home after the divorce, or that they need to make sure they have some of the family's retirement savings to ensure their own security during retirement.

Updating records

It is critical that people update the contact information on banking and investment accounts, as well as removing names of former spouses from the accounts. People will also want to re-title assets such as real estate and vehicles after the property division is final to reflect which spouse owns them.

People should review their will as well as beneficiary designations on retirement account and life insurance policies to ensure that former spouses do not still receive the assets.

Building credit

So much in people's financial lives hinges on their credit scores. Credit score can impact the ability of people to borrow money at reasonable interest rates, obtain credit cards, qualify for mortgages or rent living accommodations. After divorce, a person's credit score becomes even more important, given that people need to start building their financial identities as single people. People may need to find housing, buy cars or make other major purchases when starting over after divorce, and poor credit history can make that difficult.

Immediately after divorce, people should check their credit reports to see what their credit scores are and to check for discrepancies. People can also use their credit reports to make sure that they closed all accounts they held jointly with their spouses. If necessary, people can take steps to build positive credit, such as obtaining secured credit cards and making regular timely payments on the card balances.

Talk to an attorney

Some people think they cannot afford an attorney to help with their divorces, or that there is no need for one because they believe they and their spouses are reasonable enough to handle it alone. However, it is wise for a person to have a lawyer's assistance through the divorce process so the lawyer can look out for his or her interests and review property settlements to ensure fairness. If you are considering divorce, consult a skilled divorce lawyer to aid you.