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Life Events :  Divorce

Financial Self-Defense

Divorce
Financial Self-Defense

The financial aspects of a divorce are often as devastating as the emotional ones. Legal fees are expensive, personal assets are split up, the cost of living is higher, and your children still need new clothes.

As a woman, your financial situation will likely worsen. You should expect a major decline in your standard of living after a divorce. If you are a full-time mother who has been out of the workplace for a long period of time, this can be a scary situation.

So, what can you do?

Now is the time to get your financial house in order. If you look at the consequences early, you'll have better a chance to make your financial situation more secure in the future. Get organized and plan for the worse-case scenario... DIVORCE.

Here are some steps to take:

1) Consult with a Professional. It always helps to have a second opinion, especially with divorce. Consult with a divorce lawyer so you'll know what to expect down the road concerning property settlement, child support, and alimony issues. Learn your legal rights.

Financial help is equally important as legal help. Supplement your attorney's advice   with the insight of an financial planner or  accountant. They can help you with your decisions and discuss some of the financial issues surrounding divorce. A planner can recommend certain ways to handle debt, alimony, cash flow, how to pay for your kids college, and a variety of other topics.

2) Establish Credit in Your Name. Make sure you have at least one credit card in your own name. If you haven't already built a solid credit history, now is the time to start. Maintaining a solid credit rating will have a significant impact on your ability to secure credit in the future if you plan to buy a new home, car, or other substantial asset.

3) Close Joint Accounts. Once you've established credit for yourself, inform the creditors of any joint accounts that you are separated from your husband and want to cancel the account. Put a freeze on any joint brokerage accounts. This will prohibit your husband from making a transaction without two valid signatures.

4) Gather Financial Documents. Gather all of your financial documents in one place, including accounts that are jointly held. List the account numbers, balances, payments, debts, loans -- anything that will give you a clear picture of your current finances.


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