Margaret Johnson

Credit Solutions

A column by Margaret H. Johnson. As featured on MyTelus.com and Shaw: Finance.

Margaret H. Johnson ACE, RQIC, has over 35 years of financial industry experience in both lending and collecting. She is an Accredited Insolvency Counsellor, Registered by Industry Canada.

 

Financial Recovery after Separation E-mail
Things To Keep In Mind 

From the moment a couple contemplates divorce until after the divorce is final, both parties must protect their individual property interests. Lawyers and judges concentrate on the legal issues, not the long-term financial consequences of divorce.

Although most of us would like to have a friendly, ongoing relationship with our ex, few of us can actually pull it off. The spouse who was once relatively cooperative may experience delayed anger, refusing you access to that which is ethically if not legally yours. So plan well, and don't assume you will be able to go back later for anything.

Now let's think in terms of your divorce and financial future.
Your lawyer, if you have one, may want to see the following items:

  • Bank account records
  • Savings and chequing account information
  • Certificates of Deposit – GIC’s – Term Deposits
  • Insurance records (health, life, auto, home and professional)
  • CCRA - Income tax returns for the last 2 years
  • Loan records, including mortgage, auto, business and other loans
  • Investment reports from brokerage houses, and or mutual funds
So when you separate, take with you all the documents that you may need for the future – make a copy for your soon to be ex-spouse as they are also going to need this information - Be fair. Question - Credit Cards

Do I need to get a separate credit card before I'm actually divorced? Why?

Answer

Yes! Apply for a major credit card in your own name before you separate! There are five basic reasons why to apply for a separate credit card before exiting the marriage:

  • It allows you to establish your own credit rating;
  • It might help facilitate the outfitting of your new home;
  • It will enable you to keep your for-the-future purchases private;
  • It's one of the first things you'll need to do when you separate - cancel all your joint credit cards, so your soon-to-be-ex can't run up bills for which you may be jointly responsible;
  • You can honestly use the household (joint) income figure when applying for the card.
Also, open a new chequing account, while you are still in a marriage it will assist you to establish your own credit history.
At the time of your separation, cancel and cut up your joint credit cards, including major credit cards, store cards, gas company cards and any others. Be sure to tell your soon-to-be-ex what you're planning to do and when!
It is humiliating to try to charge an item and have the clerk refuse your card. There is no need to inflict unnecessary pain. Take Control of Your Money

"Success starts with having the opportunity to plan for the rest of your life." You now have the opportunity, so take your time and do a good job.

How To Use Your New Credit Wisely

Your expenses have not really changed much but in most cases your income has drastically reduced – now is the time to make a plan for your money -

  • Make a budget for yourself and stick to it. Be sure that you know what is coming in and what is going out at all times.
  • Avoid impulse buying. Ask yourself: If I had to pay in cash, would I be making this purchase?
  • Comparison shop. Never buy anything - and that includes any form of credit - without comparing costs and value.
  • Always read and understand application forms - before you sign them.
  • Be careful of co-signing a loan or guaranteeing a loan on behalf of others. Remember that you could end up paying off the loan if the borrower cannot handle it. I do not recommend that anyone ever act as a co-signer.
  • Know what the cost of credit is. Are you using a more expensive form of credit than necessary? Example – credit cards have a higher rate of interest than line of credit loans or personal loans from your bank.
  • Be sensible about the number of credit cards you use. How many do you really need?
  • Keep track of all of your purchases. Save the receipts for checking against the monthly statements and for keeping a running total of your obligations. Get your self a little book and track all of your spending.
One of the leading causes of bankruptcy is relationship breakdown, so if you and your partner decide the relationship is over then take your time to work through the anger and the hurt.
Do not try to “ruin” the other person financially – look at what is fair and equitable.
Take the high road that you can rebuild and remember it is “only money”.

Remember, if you are experiencing financial difficulties do not wait. Speak to a professional today.

Do you have a story that you would like to share about your experience with a debt collector? Email me – This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Margaret H. Johnson ACE. RQIC is president of Solutions Credit Counselling Service Inc. and Women and Money Inc. She can be reached by e-mail at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it  
Or call toll-free in Canada – 1-877-588-9491 
Phone: (604) 588-9491 Fax: (604) 588-9007 

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