Avoid Debt After Divorce
Straight after a divorce, the temptation to hide away in your basement listening to sad breakup songs may be too much to resist. Despite the emotional toll of your official split, you’ll want to crawl out of your blanket fort of despair before the next song ends. You have more than just the matters of the heart to think about. You need to start thinking about your finances as a newly single individual. Even if your preferred coping method runs closer to Beyoncé a la Lemonade, you’ll want to put down the baseball bat and pick up your budget sooner rather than later.
Nothing but time will mend your broken heart, but you’ll need to take definitive action if you expect to repair your finance post-divorce. You can go back to drowning in misery later. For now, use the following guide to make sure your finances survive the split unscathed.
Close Any Joint Accounts & Open New Ones
A recent TD Bank survey revealed most couples retain separate bank accounts after their union, but if you’re a part of the 42% that opened joint accounts after the wedding, it’s time to shut them down. While a joint account was an asset when you were a couple, it will only become a nightmare once you start living separate lives. In addition to accounts shared equally, you’ll want to remove your ex’s name from any credit cards or special accounts you authorized them to use.
It’s important to remember if you used the joint account to pay for any bills, services, or items you own exclusively. Any pre-authorized payments will be denied and you’ll face late fees. To avoid any expensive penalties, replace any checking and savings account you closed with new ones, ensuring you have enough cash sitting in these new accounts before bills are due.
If after splitting up the funds in your joint accounts you find yourself short right before an essential bill, a direct lender may be your only hope to cover your responsibilities. Direct lenders like MoneyKey operate on a faster timeline than most conventional lenders, so you can receive as much as $1,000 to help cover bills in as little as one business day after you’re approved. To see if a direct lender is right for you, go to MoneyKey.com and brush up on their rates, terms, and conditions. A payday loan is a perfect stopgap until you can funnel more savings into your new accounts.
Change Your Profile — Name, Marital Status, Address
At its heart, divorce is a bureaucratic process that negates the bonds of your union. Most wouldn’t wish navigating red tape with a broken heart on their worst enemy. Unfortunately it’s a reality of divorce. Once you and your spouse split you’ll have to notify private and government organization about the changes. Women have a lot more to do in case they want to take back their maiden name, as they’ll have to ensure their SSN, licenses, health insurance, and other titles reflect the change.
Depending on how you and ex ended it, you may also want to change your will and any beneficiaries on insurance and pensions. You can change most of your contact details on your own, but you will need to speak with your attorney to change anything in your will.
Get Organized
Depending on the split, you may have to pay child support, medical expenses, alimony, and other things related to the divorce. It’s easy for these new responsibilities to slip your mind — especially in the first few months. Download a money management app to help you stay on top of these payments. Many of the top rated apps, including Mint, will send notifications of upcoming payments so you’re never late.
If you’re low-tech, don’t worry. You can use a wall calendar to write out all of your responsibilities. Just remember to keep it somewhere you’ll see often so you won’t forget to make these payments. In either case, you’ll want to speak with your bank about automating some of these payments so you don’t run the risk of missing a critical due date.
Final Thoughts
Personal finances will always be a touchy subject, and divorce makes it that much more sensitive. Despite your broken heart, it’s best if you tackle your finances as soon as possible. Consider it like a Band-Aid. Just as you would rip off the tape quickly to avoid the worst of the pain, you should get your finances sorted immediately so you can avoid any confusion. Speed is of the essence, but don’t mistake it for hastiness. Be sure to comb through finance methodically, using this guide as a reference to help you get back on track as a single individual.
