Ending a marriage is rough -- on your heart and bank account. But you can keep your head above water with our expert financial tips.
But where do you begin? With child support, alimony, division of assets, paying your bills and staying sane, things can get confusing. So we went to Vikki Ziegler, a New Jersey-based attorney of matrimonial law and Founder of "Divorce Management" a post-divorce guide to financial security, for her best tips on keeping your spirit -- and bank account -- intact during divorce.
"The number one reason women get screwed in divorce is because they don't do their research before they get married," says Ziegler. "When you're caught up in the romance of wedding planning, considering the 'What ifs' aren't fun, but given the 60% divorce rate, it's smart."
However, it's never too late to get your life on track. Here are some questions to ask yourself in the wake of your marriage.
How Should We Divide Our House?
Often times, your home is the biggest asset you two share. But how to divvy it up can be complicated. Should you try to buy him out? Can you refinance the house? First off, don't feel the need to sell in a bad market just to quickly finalize the divorce. You can always store and insure items like furniture and art, and you can even keep timeshares and apartments in the family until you wish to sell. Also consider transferring assets to your children as a way to ensure the property is divided fairly and your kids are cared for. But whatever you decide, seek the advice of mortgage brokers or realtors first.
Can I Keep My Medical Insurance?
"If you stayed at home while your husband worked, chances are, you're on his health insurance plan," says Ziegler. "Once you're divorced if you don't make your own arrangements, you can get COBRA for 18 months through your spouse's company, but it's very expensive." So after finding out how long you can stay on your husband's health insurance, request health insurance coverage as part of your settlement. Although it's a long shot, it's worth discussing with your lawyer. You may be able to have your spouse pay for your COBRA or any costs in obtaining a new health insurance policy for you.
Am I Entitled To His Inheritance and Other Monies?
If your spouse received an inheritance from a relative -- and put it in both your names -- he is entitled to share it with you. However if he kept the windfall in his name, he doesn't have to spare a dime of it. Also surprising: If your spouse gets into say, a car accident, you may be entitled to a payout. So do your research. And ditto for his retirement plan. If God forbid, your spouse dies, you may be eligible to receive his retirement money. Check out survivor benefits.
Should I (Gulp) Consider Bankruptcy? In general, people file for bankruptcy when they just can't pay the debts they owe. But before you do, try to negotiate a payment plan with your creditors. If they won't budge and divorce attorney fees are draining your wallet, it might make sense to file. But know this: If you decide to file, you can still keep your IRA. In 2005, the Supreme Court ruled that Federal bankruptcy law protects individual retirement funds from creditors. The obvious downside to filing is that your credit will be tarnished for seven years. "However in extreme cases it may be worth it to start all over and build up your credit again," says Ziegler.
Do I Cancel Our Joint Credit Cards? "Its important to take your name off any cards you share together," says Ziegler. "That way, if he jets to Tahiti during the proceedings, you won't be stuck paying for it, or tarnish your credit if he doesn't." And be sure you and your spouse make regular payments on the debt so your credit record wont suffer. You may also want to close joint accounts or accounts in which your spouse is an authorized user. By law, a creditor wont close a joint account because of a change in marital status, but you can ask your creditor to turn these accounts into individual ones.
"The bottom line is divorce is messy, both financially and emotionally," says Ziegler. "But staying informed, doing your research through financial planners, lawyers, and realtors makes a big difference in your quality of life. You will get through this!"