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5 Tips For Subdueing The Painful Cost Of Divorce

Whether it comes before or after the papers are signed, finaicial hardship is all too common to many couples who have to deal with the pains of divorce. On this page we will highlight some financial tips that can subdue the pains during this difficult time.

Shockingly, 1 million Americans divorce. As we look closer, 80 percent of divorcing couples cite “debt and financial distress” as the top rift in the break up of their marriages, according to an American Bar Association survey, and studies find that most families suffer in many other areas steming from these hardships.

Whether it comes before or after the papers are signed, finiacial distress is all too common to the majority of couples who seperate.

Following a few structured guidelines can ease the pain during this stressfull time.

1. Accurately assess debts and liabilities. First, see yourself as the credit visiounaries see your credits and debts by getting a report. Online
resources are avaialble to reveiw your credit summary. (a summary from all three major credit reporting bureaus). Note all of your existing shared and individual liabilities. Settle (or get a judgment) on how you'll seperate these duties.

2. Decided early how you pland to deal with the separation of the home. If you are ther owner of the home, the monthly note is likely your biggest bill. Be certain you understand how you'll resolve monthly mortgage payments, and how you'll divide the home's value – whether one partner buys out the other now, or the home is to be sold after children are grown.

3. Budget your household to balance all of the new fees and cost invovled with divorce. Create a detailed spreadsheet, based on your new income level, and use a specified budget to pay off debts. Most people find the most efficient way to pay off debts is to first pay off smaller bills – starting with under $100 – then pay off loans and unsecured debt, such as credit cards, beginning with the account with the highest interest rate.

4. Keep a tract that your spouse is still making timely payments of his or her monthly bills.  If able, establish provisions in the divorce agreement for reporting on resolution of specefic debt. There are important implications for you personally if your spouse does not meet his/her end of the bargain on liabilities allocated through the divorce proceedings.

Call all creditors for shared accounts (credit cards, gas cards, department store cards, phone cards, etc.). Close the accounts if you are not carrying balances, or remove your name from jointly held accounts. Remember that for jointly held credit cards, and for any other debts incurred during the marriage in community property states, you have shared liability – and thereby share any potential negative credit rating impact. This means that if your spouse does not make payments after the divorce, it could come back to haunt you – and your credit rating.

If you owe back taxes, be aware that the IRS does not have to honor a decision from a divorce judgment. Consult a tax expert to help with your divorce tax planning.

5. Since you are in the transition phase from a couple to seperated you need to start early with focusing on yourself. Start making decesions on your individual needs. Begin a savings plan. Reinvest any proceeds or equity that come out of the divorce proceeding, and be especially aware of building yourself a retirement fund for the future.

If you find yourself in trouble during this stressful time -- in which you must make many financial decisions -- seek help immediately from a reliable, professional debt resolution firm. Be sure to investigate the company you choose to assist you, and seek out a company that operates for the consumer, which is markedly different from credit counseling, debt consolidation, and debt management firms.