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Friday, October 25, 2013

Best finance strategies for women heading into a divorce

Take control of personal finances in the event of divorce in preparation for single life
Establishing personal accounts helps build credit rating
Most women dream of finding their prince, marrying him and living happily ever after. Everyone steps into marriage with the intention of happiness, but unfortunately it doesn't always turn out that way. 

Although you may be besides yourself, don't forget to protect yourself financially so that you can make a fresh start after a divorce.

The month of January traditionally sees more divorce filings than any other month of the year. If you are anticipating a divorce during 2014, take some time to prepare your finances so that you can better weather the financial storm that accompanies the emotional storm.

Organize your financial documents

Gather up statements from all of your accounts and investments. Statements reflecting the previous year are mailed in January. Be sure to organize and keep copies (or scans) of everything both legal and financial. Store them with a trusted ally or invest in a private safe deposit box your husband will not be able to access. The ability to have your ducks in a row early in a divorce process may undercut any messiness later on.

Know your credit

Request copies of your credit report from all three of the credit reporting agencies. Be sure to correct any errors or mistakes contained within them. Your good credit will be necessary to obtain loans, credit or run an independent household. Be sure to critically note all of your husbands purchases on joint credit card statements if they will help you in the divorce process later.

Establish accounts in your name

Once you are no longer married, you will need credit cards and bank accounts in your name only. Set these up as soon as possible by using another bank from the one where your jointly held accounts are kept. Having a solo checking account and savings account in your name starts the process.

Opening credit cards in your name may be a bit tougher. As a homemaker or stay at home parent, you may not have enough credit on your own to satisfy a credit card company. In 2012 the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 was amended to allow non-working spouses to apply for credit in their own name but based on credit from their household's shared income status.

Put together team divorce

You will have to assemble a team of professionals to assist you. Do not go it alone as things can get quite complicated. Retain a matrimonial/family law attorney to handle legal issues for you. A therapist or counselor can also be helpful for coping with the emotional upheaval divorce brings.

Observe

Take close observation of your spouse and his financial dealings. Many husbands become unethical as they head into divorce by hiding and misappropriating finances. The income he under-reports today is the settlement you won't be able to obtain tomorrow. Speak with your accountant about filing a separate tax return even before the divorce is final.

As you head into this difficult time, be sure to take advantage of all a new start will bring. You are not alone in this situation. There are professionals and resources that you can tap when you need to. Make today is the first day you can walk down your own financial path. Do so with strength and confidence in your abilities. 

 


About the author: Derek is currently blogging for Tips of Divorce, a divorce blog for women. He enjoys blogging about divorce topics and offering divorcee’s financial advice. 

* Image license: Muriellesw, RGBStock royalty free