Divorce - Getting Prepared

Nobody likes divorce, but unfortunately it is a major life change that has a significant effect on your finances, and it happens to many people. There are things that should be done in order to protect your finances.

There is obviously going to be some expenses that you will have to come up with. The major one is hiring a lawyer. It is generally a good idea to hire a lawyer to handle all the paperwork. This is especially so if you have children or assets. Even if you have previously discussed arrangements with your spouse a lawyer will make sure everything is legitimate.

It is in the interest of both parties to try and work out the terms of the divorce on their own. The more contested the divorce, the more work the lawyers are going to have to do, which in turn means more expenses coming out of your pocket to pay them. If you and your spouse have reached an agreement and have the details figured out then all a lawyer has to do is review it to make sure everything is legitimate. Do not feel pressured by a lawyer who wants to pursue more than agreed upon. You don’t need to use a lawyer to try and get revenge and take everything away from the other person.

You will want to make copies of any important documents during your marriage. It is one of the most important things that needs to be done and too often it is forgotten until it is too late. Anything that you can think of that may be significant to figuring out the financial situation is important to copy. Your lawyer will also request certain documents that will assist him.

Here is a list of some important items that you should make copies of:



Checking Accounts


Insurance papers


Credit card statements

Utility bills

Student loans

Premarital agreements

Bank Statements

Pay Stubs

Tax returns

(Make sure that you have account numbers for all accounts.)

Make sure to close any joint credit card accounts. You also don’t want to rack up charges on an old card to get revenge. Divorce is already emotionally draining, and causing more problems will only make matters worse. Besides, you are still responsible for any charges made on the card after the divorce, no matter who made the charges. If you need a credit card, than apply for one in your own name and use it responsibly. It is not a good idea to start off on your own with a bunch of new debt.

It is important to take inventory of any possessions that were shared or brought into the marriage. Things that have been agreed upon by you and your spouse should be duly noted so there is no confusion or arguments when it comes time to divide the belongings. Even if it was a verbal agreement you should notate it. Sometimes people may be influenced to change their mind or a certain item may be used as a bargaining chip for something else. By having everything agreed upon you can avoid this extra hassle.

Get a copy of your credit score. Go online to get your free annual credit report. You need to know where your credit stands because you may have to open up new accounts and lines of credit by yourself.

Another major concern is with the mortgage. Whoever decides to keep the house has to consider their options, as they will have a significant decrease in household income. It is not uncommon to have to downsize into a more affordable accommodations. It is not a wise decision to try and stretch your income to make a house payment.

If you project that you may have some difficulties making scheduled payments on some of your bills it is important to contact that creditor. They may have some programs that will assist you during this difficult time. Certain bills will be negotiated with the lawyer to determine who is responsible for them. It is important to pay attention though because if the responsible person neglects to pay the bill it could still have a negative effect on your credit.

Divorce is an unfortunate event and too often financial situations are influenced by the stressful emotions that come with the separation process. With a clear head and business like attitude, the financial circumstances can be handled in a professional manner and ease the transition into a new lifestyle. Next month we will continue with some tips and advice on starting over after the divorce is final.

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It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.

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