Cover your Assets

Credit and Asset Protection During a Divorce

What do I do now? How did this happen? The decision to get divorced is probably the most heart wrenching decision a person will ever make, so it is logical that what happens after the decision will be traumatic. As a person who has been through a traumatic divorce, let me say that you will get through it, no matter how impossible it may seem during the first few days and months.

When you make the decision to get divorced, or when you have been served with papers indicating that your spouse has already made that decision, you are then faced with the need to protect your assets and credit reputation. Going from Mrs. Smith to Ms. Jones involves more than just beginning to use your maiden name once again. To begin, you must immediately begin to think of yourself as an individual. Your credit means your credit. Your assets means your assets, and even if they are currently in both your names, you will soon be living as a single person and proper planning is critical to your financial, mental and emotional health.

Although a divorce is a very emotional process, you cannot let emotion get the better of you. Even if your spouse cheated or did some horrible things, you must find a way to keep the anger and resentment out of the divorce. The reason I say this has everything to do with finance and nothing to do with parting as "friends". According, to compassdivorce.com, the average litigated divorce, which settles before trial, costs each spouse approximately $60,000.00. Allaboutlifechallenges.org estimates that such a case would cost each spouse approximately $75,000.00 each; and if the case proceeded to trial, approximately double.

Much of this cost is due to the acrimony between the divorcing spouses. Unfortunately, most divorce attorneys are advocates and litigate vociferously for their client. While this might be a blessing to have such an attorney represent you in most situations, in a divorce where the marital assets are finite, the goal should be to maximize the amount of money each spouse exits the marriage with, and not to have an attorney fight for every advantage. If maximizing the division of assets between the spouses was the joint goal of both parties, the legal fees would be reduced and each spouse would exit the marriage more financially stable. Therefore, it is important to realize that if you are getting divorced, no matter who commenced the action, that your financial, mental and emotional health should be your primary focus. If you have children, it is still your health that must be the primary focus, because if you are not thinking clearly, you will be of no help to them.

With this background in mind, most divorce attorneys and their divorcing clients are primarily focused on "assets". However, very few consider the impact the divorce will have on their credit. Additionally, should the couple own a home, even less consider the possibility of amicably resolving their differences by obtaining a home equity line of credit or doing a refinance of the home in order to pay each spouse's legal fees in full. By taking such action, both spouses are enabling themselves to expedite the divorce process and prevent the possibility of having the attorneys stop work because the parties have run out of money and cannot afford to get divorced.

By failing to properly plan, parties that run out of money are forced to use credit cards or do other things that harm their credit. The longer a divorce takes, the greater the threat to each spouse's credit reputation. I have written this paper with the goal of having each person understand how to exit their marriage with their credit score as high as possible.

 For more helpful information, download full .PDF article here.

About Me

I am a New York Licensed Attorney at Law providing Wealth Building and Debt Elimination services through an innovative Life Planning practice where clients can literally transform their lives by designing a road map for their future!