Women Face a Unique Set of Debt Issues in Event of Divorce

Everyone knows that divorce is an emotionally taxing event, but some may not realize the financial strain it puts upon the separating spouses as well. Divorce can be hard on women in particular, especially if they have been dependent on their husbands’ income and have not worked in many years. Continuing to pay bills and building credit become priorities for women following divorce.

In Florida, female clients have outnumbered male clients at credit counseling agencies for the past decade. For example, Orlando women make up almost two thirds of all clients at one of the state’s biggest credit counseling firms, CredAbility. Several explanations for the rise are the increase in single mothers over the past ten years, divorce and husbands losing jobs, necessitating the stretch of family finances.

The first thing women can do to help make the journey to financial independence go more smoothly is make an effort to keep divorce proceedings amicable. This will make the process more efficient and less emotionally taxing.

It is also important to establish an independent financial identity. Applying for a credit card in one’s own name is a good first step. It is also important to be financially savvy when deciding what card to select, including researching the difference between cards and understanding each card’s rate and fine print. Researching credit counselors is also a wise action. Be sure to get every financial agreement in writing, and if something seems too good to be true, it probably is.

If debt accrued after a divorce becomes too burdensome, it may be wise to consider filing for bankruptcy. Bankruptcy can consolidate loans to make payments more manageable or liquidate debt to give filers a fresh start. In either case, employer-sponsored retirement accounts are always protected from creditors, and Individual Retirement Accounts (IRAs) are protected up to $1 million. Therefore, women should rethink running down retirement accounts to keep themselves afloat after a divorce.

Divorce can be an emotionally taxing experience; following the above advice can help make it less financially burdensome.