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Debt, Divorce and Destiny When life throws up curves in the road our ability to adapt to those
curves is what sets us apart from others. Being prepared certainly does
apply in some areas of our lives, particularly finances. Here are some basic
financial 'tips' that if followed, will help you in the separation process.
Four Basic Steps:
Find out what you owe
Stop further debt
Assign responsibility
Live with your debt
Find out what you owe We recommend that everyone get a credit report at least once a year as a general rule. Before you enter in to any financial agreements, it would be in your best interest to request a report by all three of the major credit bureaus. Your situation may be that you weren't involved with the household finances, feel like you cannot trust your spouse to disclose the correct information, or finances may have been part of differences between you. For whatever reason, it is a good idea to find out the facts.
- EQUIFAX � Equifax Credit Information Services, Wildwood Plaza, Suite 500, Marietta, GA 30067
toll-free 800-685-1111
www.equifax.com
- EXPERIAN � (formerly TRW) Consumer Assistance Center, P.O. Box 749029, Dallas, TX 75374
toll-free 800-392-1122
www.experian.com
- TRANS UNION � 760 Sproul Road, Springfield, PA 19064
toll-free 800-916-8800
www.transunion.com
These three companies do not share information, so you will need to contact all three to compare the facts. Each report will cost approximately $10 depending on what state you live. Once you have the reports you should be able to make more informed settlement decisions.
Stop further debt You can't change events that have already occurred, but the best way to ensure you acquire no further debt is to come to an agreement on how you will handle anything going forward.Possible scenarios:
You can agree to pay them off now.
You can agree to be responsible for them and get more assets to even things out.
You can agree to your spouse being responsible for them and for your spouse to get more assets to compensate them.
You can agree to be equally responsible for them.
Assign Responsibility If you have property that you can sell for cash and pay things off it make things much easier with little or no confusion about who pays what and is it being paid. You should avoid getting into a joint responsibility of any kind where one month you pay a debt and the next month, your ex-spouse will pay it. That just won't work. If you haven't been able to work through issues while you were living together, there is certainly no advantage to do so once that the relationship is severed. The cleanest approach is to decide which debts each one of you will take care of and move along accordingly.
Living with your Debt - Live More Simply
Trade in your sports car for a more sensible model. Do away with the premium channels on your cable TV. Eat at home more often as opposed to going out to restaurants.
- Don't Sign Up For A Temporary "low-ball" credit card offer
These sound good initially but in the long run you will end up paying more for a longer length of time. So you will actually be adding insult to injury and getting further into debt stress.
- Don't Jump Into A Home Equity Loan
This kind of loan structure is "secured" unlike credit cards, which are "unsecured." The downside is that if you get behind on your payments, the creditor can ultimately take your house.
Although this is
definitely a trying time in your life, the way you set up your financial future
can set the course for the next phase of your life. The tips that are included
in this section are basic guidelines toward getting your financial house in
order. We hope that as you are putting your life back in order they will help
give you some direction.
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