Post Divorce Finances: 7 Steps to Rebuilding Your Financial House

Assets? Investments? 401k? A will? Since when is there any of that LEFT to divide? If you have any of those left post-divorce, you are beyond lucky. My ex-husband quit working a couple of years before I left and by refusing to work, demanded I support the household on my income alone until I was completely broke, then, knowing I couldn't afford a lawyer, took virtually everything of value and left me with all the mutual debt simply by refusing to sign the papers unless the terms were his way. Close joint accounts? Do it way before you separate, or at the very least, open your own individual accounts for everything possible and request to have your name removed from former joint accounts wherever possible. Don't take the word of your soon-to-be-ex; oversee all financial matters yourself and keep checking your credit reports every few months to make sure any creditors are not trashing you for your ex's debt (they WILL do that). No way to be too well-protected or prepare too far in advance. If you change employment or get a raise, ask for it to be direct-deposited separately into your new individual bank account. Not suggesting you hide assets or do anything illegal, just make sure your spouse can not access it before the case goes to court, and you have something saved up for your needs. Go apartment hunting, or job-hunting if you were a home maker. Take job skill classes NOW, on the net if necessary. You will need them, need every possible way to be more marketable to get by as a single-income household. Learn to sell on ebay and keep the income separate, I bought inventory wholesale that I already dealt with in business and retailed it on ebay for a significant portion of my income. Ebay saved my a$$ until I was able to relocate and re-train and stabilize my life a little bit. Don't be ashamed to furnish your new space with finds from Goodwill, friends, craigslist and freecycle.com. You can always give your friends their stuff back when your life stabilizes, so don't be ashamed to borrow that bed or microwave. The savings might be really important. If you have any suspicion of getting saddled with a tax debt, contact the IRS before you separate, and if possible convince your spouse to contribute equally to paying off any old joint returns. Establish a history of her making payments on it, so the IRS would have reason to enforce collection equally on both of you and not just you alone. As soon as you have worked out a theoretical budget on how much your new post-divorce life will cost, ransack the internet and the IRS web site for info on how to prepare a strategy to request an abatement of penalties and interest that you can enact as soon as the divorce is finalized and you are in reduced circumstances. My ex didn't pay taxes the first 2 years post-divorce, and when the IRS caught up with him, he started paying off the most recent bill first, leaving me stuck with the higher joint return. Needless to say, I have not received any of my tax refunds since the divorce - they are all applied to that old joint return, and although I have paid the amount of the original tax bill, the IRS refuses to sever liability, and keeps raising the total every year so it's as if I never paid anything. The first year post-divorce my income was $9000 (I lost my business the same year as the divorce and had to switch careers), yet the IRS gladly took the tax refund I worked for and applied it to my ex-husband's responsibility. Nor will the IRS give you the time of day unless you are represented by a lawyer; another reason to take care of IRS issues before going down to one income. No matter how much faith you have in human decency and common courtesy, and no matter how well you think you know your spouse, don't underestimate how far they will go to get everything and leave you nothing. You will be surprised to find how much the person can cost you by simply resisting, delaying and refusing to cooperate. My ex for example evades paying child support by remaining under-employed and frequently changing jobs, so I get to support my son AND have the privelege of paying 100% of the costs of delivering him for court-ordered visitation 150 miles away. I could get it legally changed if I could save enough of the transportation costs to afford a lawyer, or afford enough time off work to pester the Child Support Division to make the guy pay up. BTW you can't depend on state agencies to do their jobs either without constant pressure from you, so investigate now what you will need to know about child support enforcement and (in our case) getting kids health insurance from the state. Post-divorce you will likely have to work every waking hour to make ends meet and there will be no time to look into these things and follow up. You want out of the marriage and will give in order to get, then a surprising few months later you might find yourself having to choose between gas to get to work or groceries to make dinner for your little one when you get home, things you never thought in your life would ever come up, and at the same time be amazed that it's possible to be so busy all the time when you have to do everything yourself, and yet still know that getting out of a terminal relationship leaves you better off.