How To Avoid Bankruptcy After Divorce

One of the harshest realities in life is divorce. It is sad that in the US alone, one out of three marriages end in divorce. Aside from the emotional pain that comes with divorce, financial issues are also a challenge. If you're in this situation, how can you manage your finances more effectively and avoid money problems? Here are some financial tips after your divorce that you would want to consider:

Find a new home

If moving to a new house is an issue, you need to be very careful in choosing or purchasing a new home for you and your children. Make sure that you do extensive research not only on the property you'll buy but also with the mortgage lender you will apply for.

Consider getting a pre-approval with home loan first because it will give you an advantage when you negotiate with a home seller. It will also help you determine the exact loan you can afford when you're choosing prospective homes and it will save you the time in looking at homes that is out of your budget.

Be financially independent

Joint bank accounts or credit card extensions must be changed. You should open up a new account that is yours alone. This will prevent possible problems in the future. Opening up your own account is also crucial especially if you'll be applying for new loans.

Don't forget to open a savings account where you can set aside your personal savings for you and your kids. You should have a separate savings for minor and major emergencies. Build your savings account so that you can have enough funds to last you and your children for at least six months in case you need to find another job or in case you get sick and unable to work.

Create a new budget system.

After your divorce, there will be some adjustments not only with your expenses but with your earnings as well. A written budget will help you allocate your monthly income efficiently so that none of your bills and financial obligations were over-looked or neglected. It will also help you cut your costs and take away unnecessary expenses from your budget.

Get an insurance policy.

Apply for an insurance policy not just for you but for your children as well. Don't just rely on your ex-spouse when it comes to the security of your children. You may need to get a part time job to help you with the expenses that you now have to face on your own. Be cautious about getting into a business without doing research on the legitimacy and reputation of the company. Keep in mind that there are a lot of home based business scams out there that can catch you off guard because of your current situation.

Get help.

When it comes to the legalities of divorce, it's best to consult the matters with a professional divorce lawyer. Find a credit counseling company that is reputable and legitimate as they can help you manage your finances more effectively.


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