Your Home, Your Credit, and Your Divorce

Divorce is one of the most horrible things a person can endure. There are a plethora of books and support groups out there that deal in the emotional aspects of divorce but what about the financial aspects…especially if you own a home.

Your emotions are making big financial decisions. The person who got hurt wants revenge. And you all know how revenge works…eventually you are the one who ends up being hurt not the person you wanted to hurt in the first place.

The person who caused and/or asked for the divorce feels guilty and therefore may not ask for or get what is rightfully theirs. They also may agree verbally to things they shouldn’t in exchange for a speedy non confrontational divorce.

But the problem with both of these is you are making decisions with the other person in mind instead of yourself. How do I take care of myself and my finances? What can I afford? Should we sell the house? How much debt am I responsible for? Do I have to wait until the divorce is final before I buy again? What if we can’t sell the house?

These are just some of the questions that should be asked. And you can find the answers to all your questions but only if you are in the right frame of mind.

So how do you financially divorce? Well you have to become the CEO of your divorce. You have heard people say about business, “it’s not personal…it’s just business”. This is exactly how your financial divorce should be especially if you own a house or plan to own one.

A CEO would never dream of agreeing to something verbally. They know a verbal agreement does not count and it cannot be enforced. The same goes for your financial divorce. Never ever verbally agree to anything during your divorce. Get everything properly documented.

You may think of a CEO as a bit ruthless and taking more satisfaction out of crushing their competition then anything else. But I do not really think that is what most business owners are.

Yes, that makes headline news and a good plot for a movie but most business owners just want to do what is right for them. They make decisions according to what their business needs are and that is what you should do too.

No emotions allowed…period. But just for the times when you are making financial decisions. When you are not making financial decisions, you can grieve (or celebrate) how you see fit.

And that is the beauty of this. You can curl up on the couch for weeks, stay drunk for weeks, cry to friends or family for weeks, etc and it will not hurt you financially. You made the tough decisions already and now you are free to deal with your emotions however you see fit.

A divorce is supposed to be painful but you get over it and move on. If you make poor financial decisions in the midst of it, you feel the pain of your divorce over and over again. Your poor decisions come back to haunt you and usually at the most inopportune times.

Like, for example, when you meet someone else. What if you wanted to buy a house with someone new but your credit was ruined. How did it get ruined? You moved out of your house with the verbal understanding the other would pay the mortgage.

They did not and now your credit is ruined. And you can’t just explain that away when you want to buy another house. You are responsible if your name is on the mortgage note. You agreed to pay whether you live there or not.

Or, you have a contract to buy a new house but your loan gets denied because you are using child support or alimony to qualify and it has to continue for a certain period of time after you close. If it doesn’t, you do not qualify.

I have seen both of these (and many more) personally and the sad thing is they could have been avoided. The last thing you want is your divorce to linger long after you have gotten on with your life.

And even if you don’t own a house right now, protect yourself and make the right decisions so you can in the future.

Good Luck!