Getting your Finances Back on Track after divorce

13 November 2013

Divorce can be a devastating event for anyone. Not only can it take an emotional toll on those affected, but it can also cause tremendous financial strain. Nothing is easy with divorce, particularly the noting down and the splitting up of financial assets. Knowing your finances after divorce is crucial.

The following are some suggestions that may help a person get their financial situation back in the fold once they've gone through a divorce:

Finances After Divorce

Know Your Place

Divorce can directly affect your incomes. It is of paramount importance that a person sustains themselves now that they are alone. Do not rely on alimony as an only source of income. Rather, it is very important for one to maximize what money can be made.

A person who is going through or has recently gone through a divorce can benefit from refinancing their home. That way, if their finances have taken a hit from a divorce, they might be able to save some month-to-month income or mitigate an outlay of more money through a lower interest rate. In many cases, this can be a significant improvement toward available income.

Know What You Have

It's imperative that a person going through a divorce, or have been through one, understand what they have as far as their own assets are concerned. It is also helpful to know that if finances are in dire trouble, there are services available like debt consolidation to assist in the management of debt, amongst other things.

It is important to gather up all notions of what was brought to the marriage. And now that it is or has been dissolved, what rightfully belongs to both persons before the marriage. This can involve family money, stocks and investments as well as property. Note it all down and with the understanding that the other person in the divorce cannot touch it, whether or not a prenuptial agreement was taken out.

It is of additional importance to note down the date of a separation. In some regions, two people have to be separated for twelve months in order for divorce proceedings to go on.

Keep Yourself Up To Date

This is a good time to update any documentation and accounts that are in shared names. In this case, the bank where any shared finances are held should be contacted in order to close joint accounts and set up separate accounts that the ex-partner cannot access. If you are renting your house, the divorcing couple should contact the landlord or rental agency to have either the ex-husband or ex-wife removed from the lease. This ensures if any damage is caused to the property, that liability is limited to the one who caused the damage.

Property Rights

It should be noted that even after a person leaves their house, they still have a right to share that property; in fact, in some states, community property also means shared rights. At this juncture, the proper legal representation may be needed. So, it is wise for an individual going through a divorce to understand, by way of a divorce attorney, what rights they have in regard to shared dwellings.

Smiling Man

Plan Ahead

If one partner managed the finances of a couple, it is now time to take matters into separate hands. Financial advisors and accountants can help to organize assets in order to provide protection from an ex-partner. It is also a good time to become familiar with financial management. Any paperwork that details utility bills, investments, deeds, tax records and other policies should be within reach and understood fully. Aesthetically, a new workspace can give focus to what needs to be done in this regard.

Guest Blogger: Dave Landry Jr. is a small business owner and blogger who went through his own divorce two years ago. Dave went through a rough period of time trying to recuperate his bank account after the lengthy process. He shares some of the insight on how he did so in this article. He hopes this information will help divorcees going through financially difficult times.