Divorce is a challenging experience for most spouses. Not only is divorce emotionally challenging, it can also be financially challenging for Alabama spouses. There are ways that divorcing spouses can protect their credit and survive divorce.
It is essential for spouses to have accounts in their own names and have their own credit once their bank accounts have been separated. Spouses may also want to make sure they know how to handle their debt, and another thing to consider is their credit. It is recommended that spouses get in contact with the credit bureaus to obtain copies of their credit reports. If it’s discovered that there are cards with a zero balance, it would be wise to cancel those cards. Creditors are less concerned with the divorce and more concerned with whose name is listed on the account, and they will go after the account holder if the bills are not paid.
Another aspect to consider is if the spouses wish to keep or sell their home. In spite of houses normally appreciating in value, the property may not appreciate as significantly as funds that are put aside for retirement. Lastly, when it comes to retirement funds, spouses may need a Qualified Domestic Relations Order to divide the assets. For those who are unfamiliar, this is a legal document that is forwarded to the benefits department of the retirement plans provider and acts as a guide on how assets are to be separated.
Divorce does not always have to result in a financial disaster. Alabama spouses can benefit from separating their bank accounts and closing out credit cards. They can also benefit from having knowledge of what’s listed on their credit reports and how much debt they can handle as a single person. When property division becomes an issue, spouses may participate in mediation to avoid a bitter courtroom litigation process and increase the chances of favorable outcomes.
Source: wgntv.com, “Your Money Matters: Surviving a divorce”, , Aug. 25, 2014