Going through a divorce can be both emotionally and financially difficult and sometimes it is hard to separate emotions when it comes time to making serious decisions during and after a divorce. During this post and the next we will discuss seven money mistakes to avoid after divorce.
The first mistake to avoid is ignorance. Though a divorce decree can identify who is supposed to pay what account, the decree does not affect a former couple’s previous agreements or contracts with their lenders. According to a divorce financial analyst, the most frequent mistake that individuals make after divorce is to assume that because the former spouse has been ordered by the court to repay a debt, they are no longer responsible for it. Former couples should try to erase joint debt and close accounts held in both names.
The second mistake to avoid is delusion. If one spouse relied on the other spouse’s income during the marriage, then post-divorce a new budget should be created to reflect the change in income. Often, parents try to maintain a former budget with the purpose of maintaining their children’s standard of living. As a result, parents can go into credit card debt as they live beyond their means without help from a Naperville debt collection law firm. Parents who divorce and divorcees without children should not live beyond their abilities.
Neglect of legal documents can also get individuals into financial problems after divorce. If a former couple owned a home together, credit problems can occur if paperwork is not updated. Sometimes, one individual is awarded the marital home but the paperwork for the home is not updated to reflect the new circumstances. If mortgage payments are not kept current by the owning ex-spouse, the credit of the other ex-spouse can be ruined. Next time we will finish talking about the other four post-divorce money mistakes.