Six Steps to Consider when Deciding to Divorce (or Not)
You’re at a critical point in your relationship. Should you work on your marriage or get a divorce? Only you can decide. And there is a lot to consider, from insurance and finances to your emotional well-being. Here’s a checklist of steps to consider.
1. PROTECT YOUR CREDIT
A. Check your credit rating to make certain your spouse hasn’t hidden any assets or run up debt and find out what your rating will be as a single.
Why do I need to check my credit rating?
Credit score fico score is your profile’s information summarized as a number on a scale of 300 to 850. (For more details, go to www.myfico.com.) A good score is mid-700s. The average score in the U.S. is approximately 660. Your credit rating can help you get financing for everything from a rental apartment to a car to a new home. The higher your credit score, the less you can expect to pay on a loan, from mortgage rates to interest rates on your credit cards. If your spouse has run up a credit card bill, gotten a loan you weren’t aware or gotten a card with both names, it can affect your credit rating.
How often should I consider checking it?
Your rating depends on a number of factors, including how many lines of credit you have, the amount of credit available to you, your total balances, monthly payments and monthly minimum payments as well as how many times you’ve been late with payments and any court judgments against you. You can get one free credit report a year from each of the credit bureaus; Experian, Equifax, and TransUnion. In addition, WalletHub.com provides free, daily credit scores and reports.
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B. Cancel any joint credit cards so that you don’t rack up more marital debt. Get a new card in your name to build your credit.
Why should I cancel the cards?
One of the biggest mistakes recently divorced individuals make is assuming their former spouse will close the joint accounts, pay them off in full or separate the accounts legally. Often, this is not the case and both people wind up damaging their credit rating and seeing a dramatic decrease in their credit score.
Why do I need new credit cards?
While you were married, chances are your credit cards, car loans, mortgages and other types of financing were established as joint accounts between you and your former spouse. Perhaps some accounts were also set up exclusively in your name or your ex’s name. Now that you’re officially single (or about to be), it’s essential that you establish or re-establish your own credit.
What should I look for when I get them?
Know the annual fee; know if there is a processing fee for completing the application; know the annual percentage rate, which is the rate you’ll be paying on the balances. Introductory rates usually last no more than 12 months, so you should know what the rate will become; know the costs for late fees, over-limit fees, balance transfer fees, online payment fees, cash advance rates, telephone payment fees, and other hidden fees associated with them.
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2. STASH SOME CASH
A. Open a bank account in your name only. Stop contributing to retirement funds, which are marital assets. Stash some cash to pay expenses if you decide to file.
Why should I open a bank account in my name?
You need to establish credit as a single. You can do this by opening a checking or savings account in your own name. This helps prove financial responsibility. And later, if you do file for divorce and need quick cash, it will be easier to obtain in your own name.
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B. Get a safety deposit box.
Why should I get a deposit box?
Experts suggest a deposit box as a place to hold copies of financial documents, from house deeds to bank statements. In addition, all your valuables, such as jewelry can be stored in the box for safekeeping. You should discuss what’s in the box with your attorney, when you hire one.
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C. Know your options for short-term loans to help with cash flow if you need quick cash.
Why do I need quick cash in a divorce?
The fact is, divorce doesn’t just change your emotional life, it changes your financial one as well. From hiring an attorney to finding a new place to live, the expenses add up quickly. Knowing where to get money when you need it can help.
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3. DEAL WITH DEBT
A. If a debt is causing marital stress, seek help from a credit counseling agency for a payment plan or bankruptcy. If you cannot pay your mortgage, consider selling your home or asking the bank about a short sale.
What can a credit counseling agency do for me?
Financial difficulties are the biggest source of stress for most people. Debt management plans (DMP’s) through a credit counseling agency can help you eliminate your debts faster than you could on your own. That’s done by helping you reduce your interest, and possibly your monthly payments. They can even help your credit because on a DMP, most creditors will stop adding late/over the limit fees. In certain situations, they can also stop you from getting a judgment placed against you. Counselors can also provide you with guidance on what actions are the most appropriate.
What is a short sale?
A short sale is when a home sells for less than an individual owes the bank on his mortgage. It requires bank approval. The homeowner makes arrangements with the bank, which must agree to the deal. To qualify you must have had serious problems: a divorce, illness, lost your job or your business failed, for example. If a buyer makes an offer, the bank must approve it.
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4. CHECK YOUR INSURANCE
A. Make certain you know the benefits and costs of health, life, disability, home, auto or any other insurance you share with your spouse.
If you have children, know the costs and benefits for them as well. Consider what changes would have to be made if you divorce. Budget for these and get good rates.
Why do I need health, life or disability insurance?
If you decide to divorce, all three are important for you and your children, if you have them. The cost of the insurance may increase, depending on your marital status. Life and disability insurance are important if you and your former spouse have debt and have to continue to pay it after your divorce. If he or she is assigned that debt and something happens to them, you may still be legally responsible, regardless of what the court has said. The insurance can help you in the long term.
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5. EXAMINE YOUR MARITAL FINANCES
A. Use a program, calculator or financial professional to determine your income and expenses.
Why should you do this?
Knowing how much it costs to maintain your current lifestyle, from your mortgage to your monthly auto payment, can help you as you make decisions about what you should do next. Some people may find that financial issues keep them together for a time until they can pay off bills. Others can negotiate these things as part of a marital settlement. Either way, having the knowledge is half the battle.
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B. Act like you are financially single. Create a budget as if you can no longer count on your spouse’s income. Calculate your monthly budget.
Why should you do this?
Once you figure out how much you owe as a couple, then you should determine what your life will be like if you give up your spouse’s salary, assuming they have one. Then determine how much it will cost you to get back on your financial feet again as a single — from rent on your own apartment to groceries. This can help you determine how much of the marital debt you can take on, if you need to, should you decide to divorce.
6. GET THE SUPPORT YOU NEED
A. Talk to a marriage counselor or attend a faith-based or other relationship improvement program.
Does marriage therapy really work?
About 2 percent of the American population sees a marriage and family therapist each year. Almost two-thirds of marital therapists describe themselves as “neutral” on the question of whether a couple stays married. The result depends on the couple, experts say. If both spouses want to work on the issues that brought them to counseling, then marriage therapy can work to keep couples together.
Can faith-based programs help?
Like secular programs, faith-based marriage programs can help if both spouses are willing to work together toward a common goal. There are faith-based programs available for almost every religious affiliation, including some for military personnel taught by military chaplains. Also like secular programs, most faith-based programs are based on teaching improved relationship and communication skills, with prayer and religious teachings as part of the instruction.
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Learn more about the American Association for Marriage and Family Therapy.
B. Talk to a doctor about depression, stress or other medical issues related to your marital problems. Try to keep fit and healthy.
How can a doctor help with depression, anxiety or sleeplessness caused by marital stress?
According to U. S. Surgeon General, about 40 percent of those undergoing divorce report an increase in symptoms of depression and anxiety. “Any life change is anxiety and stress producing but divorce is one of the worst because it creates an unknown, unpredicted situation with lots of insecurity, low self-esteem, and fear,” said Lucinda Bassett, CEO of the Midwest Center for Stress and Anxiety. If marital stress is causing difficulty with sleeping, eating, socializing or exacerbating medical conditions like asthma or irritable bowel syndrome, experts suggest you talk with your physician who can help you by prescribing medication as part of your treatment, which may also include counseling.
Are there natural methods to help me deal with marital stress?
Some studies have called divorce a trigger for a change in lifestyle. Some people cope in negative ways, using alcohol, nicotine or other substances to deal with marital stress. But experts suggest eating well, taking vitamins or other natural supplements and keeping active can make you emotionally, physically and spiritually stronger in the long run, no matter what happens at home.
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C. Know how divorce can affect your children.
What are the effects of divorce on children?
The emotional and financial changes of divorce affect a child’s ability to cope successfully. Financial stress may cause problems later in life with money worry. Children who are confident and happy before the divorce will adapt more easily. Children with high intelligence are less likely to experience emotional difficulties. Some children may even benefit, using increased social problem skills developed during the divorce when they become adults. Equally important is the custodial parent’s well-being. Happy parents make for happy children. This means that when mom and dad invest in their own physical, mental, or psychological health, the kids benefit.
What are the warning signs that something is wrong?
There are five areas of your child’s life that need to be watched after a divorce, according to Alison Clarke-Stewart, author of “Divorce: Causes and Consequences.” Those include’ school work; relationships with siblings; relationships with grandparents; what they’re doing with their free time; their outlook on life. If you see any negative behavior in those areas, you may want to see counseling to help your child learn better coping skills.
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D. Seek help for abuse.
What is abuse?
One of every four American women will experience abuse during her lifetime, according to a 1999 study by the National Institute of Justice and Centers for Disease Control. A total of 85 percent of victims are female and 15 percent are male. Warning signs include: shouting and cursing; hitting, slapping or pushing; making threats; isolating someone from family or friends; throwing things.
Where can I get help?
If you are a victim of abuse, call 1-800-799-SAFE (7233) 1-800-787-3224 (TTY).
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