Follow these tips, and you won’t have to start over
For many moms, me included, divorce can mean teetering on the edge of financial ruin. And that’s scary! But now, after helping myself and countless other Solo Moms protect and rebuild their credit, I know it doesn’t have to be that way. Divorce does not have to mean that you start all over with your credit and finances. Follow these tips so your divorce doesn’t ruin your financial dreams and goals.
- You set the tone. It goes without saying that going through a separation and divorce is an emotional time for all involved. As I’m sure you are well aware, the various parties act and react in different ways. It’s unavoidable. But it is possible to affect how you handle the business aspects of your separation and divorce. When it comes to your credit and finances, do your best to create an atmosphere of businesslike, open communication so that you can work together to tie up loose ends financially. It’s important! Your credit and finances, not to mention your ability to support yourself and your family, depend on it.
- Get your credit report. Your first step to healthy credit and financial independence is knowing where you stand. Start by getting your credit report. You can visit Annual Credit Report for a free copy of your credit report. If you want to see your FICO score, you can purchase it at myFICO. Take the time to examine the report and highlight all the joint credit accounts you have with your spouse. Keep in mind that you are responsible for all the liabilities as long as your name is on the credit account.
- Make a plan for your debts. Now that you know where you stand, you need to decide, along with your spouse, what you will do about each account. My advice always is to pay off all the joint debts you can and close those accounts. Request documentation from the creditors that says the debt has been paid in full and the account is closed. If there are accounts that you cannot pay off or absolutely want to keep open, you will have to agree on who will be the responsible party and contact the creditor to have the other spouse removed from the account. Make sure to get a letter from the creditor stating who has been removed to prevent future problems.
- Stick to the facts. Simply having a divorce decree from the courts will not protect your credit or finances from being ruined by your ex. You need to be diligent and handle this financial detanglement like a business transaction. Avoid letting your goodwill or emotions get involved here, or you could end up on the hook for a maxed-out credit card that had a zero balance at the time of your divorce, all because you never closed that account.
Going through the process of separating finances and credit from a spouse is not easy. If you can approach it with open communication and a cool head, you will be doing yourself a favor in the long run. Your financial and credit health are worth it! Please let me know if I can help. Drop me a line (workandfinances@esme.com), and stay tuned for more credit tips for Solo Moms!
Curious how other Solo Moms manage their finances? Sister Chat is a great place to ask questions and get advice from Solo Moms like you.
Jeanne Kelly, ESME's Resource Guide for Work and Finance, is a Solo Mom who founded the Kelly Group, a company that provides credit counseling to individuals and organizations. She has appeared on the Today show and has also been quoted in media outlets such as CNN, Money, and the New York Times. Kelly is the author of the book The 90-Day Credit Challenge.
Please feel free to contact us with any comments or questions.