Finance Categories

Credit score protection when going through divorce

No one gets married to get divorced but it happens and when it does, it is important to protect yourself and your finances. The emotional upheaval of a divorce might make you lose sight of your future financial well-being.

Make sure that you get the best legal advice you can afford, not only for the children's sake, if there are any, but to ensure that you get the best deal financially.

If you cannot afford a lawyer, legal aid might assist you. You may opt to use mediation services to dissolve the marriage and their fees are far cheaper than legal fees.

Make a list of your current expenses and prioritize them. Non-priority debts include store card payments and money you have borrowed from friends and family. Decide what you can afford and what you will have to stop paying.

Monthly payments should be considered for essentials only for things like rent/mortgage payments, car installments, utility bills, taxes and secured loans.

As a matter of urgency, draw up a budget with your income and expenditure. Seeing it in black and white will highlight the important items.

Your income should exceed your expenditure. If not, you are in trouble and you might have to consider loans to tide you over.

It may be advisable to speak to your bank manager or bank personnel about any financial difficulty that you may have. They might offer solutions and if they understand your predicament you might find leniency on their side.

If you have a credit card, you may use the credit facility for any unforeseen expenses and if you have one with an interest free period this may give you some breathing space whilst you take stock of things.

If you do not have this facility it may be worthwhile checking the range of credit cards at moneysupermarket or a similar comparison site to see what products are available to you. However, you should also bear in mind that after the introductory interest-free period ends, all credit must be repaid or you will have to pay it back monthly and with a high interest rate.

You can apply for an overdraft on your current account if you do not already have it in place. Overdraft rates are also high, so use this with care.

Get advice. Mediation services are available to help you with your debt in the event that you cannot sort it out yourself.

Consider a debt consolidation company. With all your debt under one roof, you will have one monthly repayment only. The company will also liaise with your creditors on your behalf with regard to what you can afford to pay back each month.

This will create trust, as the creditors will know that although they will receive a lesser amount than what is due, the amount agreed upon will eventually be paid. The loan company will also attempt to get a lower interest rate for you.

The debt consolidation company will charge a fee for their services, as they are after all a business and as such, they must generate an income.

You may try to negotiate with your creditors yourself, although this could be a difficult road and you will not necessarily be successful. You will, however, save the fee.

It is of the utmost importance to protect your credit score when going through a divorce and at any other time of your life. Be diligent and plan for a good financial future, both for yourself and for your children.

  Financing

Tetra Finance Directory > Financing

Finance Resources

Finance Guides

Finance Blogs

Finance Sites

Finance Link