By itself, divorce is already a very complicated and heart-wrenching matter. You and your spouse are not just separating physically; you’re tearing apart the emotional bond that your marriage brought into existence. This is obviously going to be a difficult time for both of you. The emotional toll isn’t the end of it, though. You also have to deal with a lot of legal things, financial updates, and paper work before the divorce is finalized.

Divorce and Personal Finances

On its own, divorce does not have a direct effect on your credit score, in that your divorce will not affect how these companies calculate your score.

Whether you are single, married, or divorced, it doesn’t matter and won’t affect your credit score at all. However, this doesn’t mean that you won’t have to worry about your credit and your finances after your divorce is finalized.

When you were still married, it’s very likely that you and your spouse took on some financial obligations together. Dividing up these obligations can be problematic and result in negative effects on your credit score.

For example, jointly held debt from credit cards will have to be paid off by at least one of the two parties. When the obligated payer fails to pay this debt off, the creditors will mark not just the payer’s score, but also the former spouse’s. It’s not a fair deal, but that’s usually what happens.

What’s worse is that sometimes, the spouse will intentionally do something to ruin the other’s credit score, completely out of spite. As mentioned earlier, a divorce is a messy, emotional process, and if one or both parties are feeling spiteful, crazy things can happen.

Protect Your Finances While Going Through a Divorce

This is why it’s imperative to make sure your personal finances are protected while you’re going through a divorce. Here are some steps to take:

Evaluate Your Credit and Savings Accounts

When you’ve been married a long time, chances are you’ve already gotten a little too comfortable and may have forgotten how to handle your finances on your own.

How often have you heard one spouse say “my husband or my wife use to take care of all of our money.”?

If that is you, now is the time to take stock of your personal accounts by going over your credit report, reviewing your bank accounts, and studying any personal loans you may still be paying off.

Start Planning

Through a divorce you are essentially downsizing. Where you may have had two incomes in your household; now you’ll have to make do with one.

This means you have to start working on a budget that will cover all of your essentials.

Focus on the important things first, like shelter. If there are mortgages and debt to pay off, always put the house first. You don’t want to end up on the street. Prioritize when you set your budget so you can move to a smart post-divorce financial situation.

Untangle As Much As You Can

Joint bank accounts are complicated and one thing that people need to know is that a divorce won’t change a joint contract at all.

You have to make the effort to inform the lender of the change, and it will be a bit complicated to split the account into two individual ones.

The point is that this is not something you and your ex-spouse can decide on your own. You will have to talk to the lender and try to work out the best settlement for all involved.

De-Authorize Ex-Spouse On Joint Credit Cards

This is one of the first steps to take, especially since you really want to make sure that all the financial matters are settled cleanly and clearly.

Call your credit card company and get your former spouse de-authorized. It’s similar to the untangling step above; you really have to make sure that your previously joint or connected financial accounts are clearly separated or replaced with individual ones.

Send In A Consumer Report

Sometimes, the sabotage is deliberate.

A disgruntled former spouse may promise to pay off a debt but eventually refuse to do so in order to hurt the other’s credit score. There are some horrible stories out there.

To protect yourself, it’s necessary to contact the three major credit bureaus that handle credit reports, so that a consumer statement explaining the situation may be included in the next report. It should at least help lenders understand your situation, and could definitely make things somewhat better for you in the long run.

Revisit Your Will

As soon as you are divorced you need to have your current Will rewritten if the beneficiaries or executor of your current Will is your spouse, now your ex-spouse.

Revisit any life insurance policies as well, and make sure you make the necessary changes right away. Waiting even a few weeks or a few months to do this could be a huge mistake, simply because unfortunate accidents can happen so quickly. And if you neglected to make the necessary changes you and your family may be upset by the outcome.