When a couple decides to marry, picturing a future in which they go through a divorce is likely the farthest thing from their minds. Making a commitment to your partner requires a level of hope and optimism that you will support one another through life’s challenges. However, approximately half of all marriages still end in divorce or legal separation, whether the marriage lasts for several decades or a handful of months. Even if you and your spouse agree that ending the marriage is your best option, this period of your life can be emotional and stressful. Not only are you mourning the loss of this partnership, but you may be struggling with the financial impact of the divorce and how these substantial costs may affect your economic stability once the divorce is finalized. With the median cost of a divorce in the United States hovering around $7,000, the financial considerations of filing for divorce in Washington state are not insubstantial. Of course, this figure is far from a one-size-fits-all model—contentious divorces or separations involving a number of complex assets can cost tens of thousands of dollars. 

As you begin to explore your divorce options in Pierce County or King County, it’s important to understand the potential financial implications of this decision. In some cases, a divorce can affect your credit score or create financial challenges that were not present during the course of your marriage. However, it’s essential to recognize that financial recovery after divorce is possible. Moreover, there are steps you can take to minimize the financial impact of divorce and support your financial recovery after divorce so that you can move forward into this next chapter of your life feeling optimistic and confident. Enlisting the guidance of a trusted and caring Seattle divorce attorney is a great way to ensure that you have the tools you need to regain control of your financial future once the divorce is finalized.

Does Getting a Divorce Hurt Your Credit in Washington State?

Many people contemplating the divorce process ask questions like, “Does divorce hurt your credit?” and “Why does divorce hurt your credit?” Generally speaking, the process of separating a couple’s financial assets and outstanding debts after several years of marriage can be complicated and stressful. As you and your soon-to-be ex-spouse move through the stages of the divorce process, you will need to address joint debts thoroughly in order to avoid negative consequences once the divorce is finalized. Let’s take a look at how credit responsibilities are typically handled during the divorce process in Washington state.

Understanding Credit Responsibilities During Divorce

Many couples have joint credit cards with both their names on the account. Even if you agree to divide up debt obligations as part of your divorce settlement, one party’s credit score can still be affected by the other party’s actions long after the divorce is finalized. For instance, if your ex-spouse agreed to pay off the debt on a jointly owned credit card and they fall behind on the payments, your individual credit score can still be affected by their failure to pay if your name remains on the account. Essentially, it’s critical that you examine the original contracts with any lenders (i.e., credit card companies) to ensure that the terms of your divorce align with the company’s policies so that you are not struck with any unexpected fees hits to your credit score after the divorce is completed.

How Closing Joint Credit Cards Can Affect Your Credit Score

While closing jointly owned credit cards with your ex-spouse is a strategic way to prevent their decisions or actions from negatively impacting your individual credit score later on, it’s also important to understand how closing joint credit cards could affect your total credit utilization ratio. This term refers to how much of your available credit you are using at any given time, with the ideal being no more than 30 percent of your total available credit. Generally speaking, individuals with the highest credit scores usually have credit utilization ratios that remain below ten percent. So, if you close a joint credit card, this will affect your total available credit (and, in turn, your total credit utilization ratio). As you make financial decisions during your divorce negotiations, keeping an eye on your credit score and credit utilization ratio is highly recommended to ensure that you are not caught off guard later on.

How to Recover Financially After Divorce in Washington State

Understandably, divorce can wreak havoc on your finances. Many people experience a rocky transition from a dual-income household to the new reality of supporting themselves. This shift can be particularly challenging for spouses who gave up a career during their marriages in order to focus on raising their children, maintaining the home, or performing volunteer work. Suddenly, these individuals find themselves without the steady income of their spouses, which can be disorienting and stressful. In many of these situations, the court may put a spousal maintenance order in place to ensure that the lower-earning spouse continues to receive financial payments from the higher-earning spouse to ease the transition once the divorce is finalized. However, even economically secure individuals may encounter financial difficulty during and after the divorce process. Here are some tips and strategies to guide those interested in recovering financially after divorce in King County or Pierce County.

Building Credit in Your Name

If you’re wondering how to financially recover from divorce, building credit in your name is a good place to begin. Opening a credit card and bank account in your name allows you to start saving for retirement and shields you from the poor financial decisions of your ex-spouse that could affect your individual credit score. Be sure to update your real estate documents to remove your ex-spouse and adjust the names of the beneficiaries listed on your life insurance or bank accounts. Keeping an eye on your credit score is highly recommended to ensure that the decisions you are making are nudging your credit score in the right direction.

Create a Budget to Adjust to Your New Financial Reality

Without the reliable income of your ex-spouse, you may find yourself struggling to adjust to your new financial situation. During this stressful time of transition, it can be helpful to create a budget that allows you to allocate your financial resources appropriately. Map out your monthly expenses (i.e., rent or mortgage payments, utilities, groceries, etc.) so you have a solid grasp of your financial obligations with little to no room for surprises. As you work on your budget, you may realize that you may have to be more mindful of your spending habits for a few months and prioritize your savings in the short term. Once you have created a comfortable financial foundation, you can begin to adjust your budget accordingly.

Prioritize Savings as You Build Your New Safety Net

An effective budget should include a safety net. Unanticipated vehicle issues or emergency medical events can present significant financial challenges for newly divorced individuals who are already grappling with a new economic reality. Whenever possible, try to set aside a portion of your income and put it into a savings account. Even setting aside a small amount every week can add up, which will make you more financially resilient in the event of an unexpected (and costly) emergency. 

Seek Professional Guidance As Needed

Divorce is a major life event that can upend your life in many ways. However, you do not have to navigate this challenging time all by yourself. If you need help sorting through the financial complexities of your divorce, enlisting the guidance of a financial advisor or other professional can be an empowering and reassuring experience. You can rely on their professional expertise to ensure that you are laying a strong and secure foundation from which to begin your life’s next chapter. Sometimes, knowing that you have a dedicated advocate in your corner can make all the difference in your ability to move forward with more confidence and grace.

Regain Control of Your Financial Future Today

At the Hemmat Law Group, we recognize that divorce can be one of the most stressful and heart-wrenching experiences anyone can go through. We understand how challenging and daunting it can be to move through complex negotiations about dividing financial assets, establishing child custody arrangements, and untangling your lives from one another. Our dedicated and highly experienced legal professionals believe in providing caring and compassionate support to every client we serve. When we meet with you, we will listen carefully to your goals and concerns to ensure that our legal counsel is customized to accommodate your every need. Together, we can help you lay the solid and secure foundation you need to face the future with greater certainty and confidence. 

If you are thinking about getting a divorce in Washington state, you deserve to work with an experienced and caring attorney who will put your needs and best interests first. Please call the Hemmat Law Group today at (206) 682-5200 to discuss your options with a dedicated and empathetic Seattle divorce attorney.