Disclaimer: I am not going through a divorce, but I do know several couples at various stages of the process and when a contributing writer sent this over, I thought it might be helpful for some folks.
Tips on Protecting Your Finances During Divorce
When you first meet someone, fall in love and walk down the aisle, you never imagine that it could end in divorce. Unfortunately, as many as 50% of marriages end in divorce. So, it is the stark reality of a lot of once loved up couples. If divorce is on the cards for you, whether you have made your intentions to your spouse known or not, you will be going through a whirlwind of emotions as well as questioning yourself every waking moment. Are you doing the right thing? Can the marriage be saved? How will this affect the children? How can you protect your finances? Every one of these questions, as well as the multitude more, are perfectly natural. It is natural to fear the unknown, and divorce is one of those things. The one thing that is important above all other things is that you remain calm and think logically. Try as best as you can to take emotion out of the equation and focus on the things you can do. It is only by careful consideration that you can protect your finances and assets come to those potentially nasty negotiations.
Research the Law
Perhaps you should do this before you even let your partner know about your intention of divorce, as it may be quite time-consuming, and you don’t want any added pressure. You need to research the law in your area and discover what your rights are. You will want to know how the law lies if you do not have a prenuptial agreement and what you can do to mitigate the coming financial storm. The more you know the better equipped you are to negotiate. Every divorce has its own individual set of circumstances, and it really depends on how merged all the details between you and your partner are. It may help you to create a list of things that need discussing and working out. There is probably a lot more than you realize. So, do some investigation of your own to get to grips with the basics before taking it any further.
Seek Professional Counsel
Once you feel you have the basics down. It is probably a good idea to discuss your option with a professional Family Law firm. You will already have an inclination on how difficult this upcoming process will be, so seeking advice and support is essential. A professional will help prepare you for the upcoming battle and remind you of things that you may not have already considered. They will remind you of the importance of considering the human element. Your partner may well drag things up that happened 20 years ago, so you have to be prepared for any eventuality. Also, a professional will offer you sound advice on how best to deal with any children and how to avoid them getting caught up in this whole messy affair. They need to be protected and also told that they are loved by both parties. It may be best if you seek advice from more than one source too. Maybe talk to someone who has recently been through a similar divorce. There are plenty of divorce stories online that you may be able to benefit from too.
Close your Joint Bank Account
Okay, so you are probably not going to be able to do this without your spider knowing, but it is a very important step to go through. You have to sever financial ties. Any account that has both your names on means you are both liable for the debt on it, even if you are not the one who has accrued this debt. First, get a full report on the account, and it is best to close this account asap, stop more debt accruing, and begin a payment plan for paying off the outstanding balance. Also, close any other accounts that are in both your names, including utilities. If you have moved out, you do not want to be liable for bills that should just be in your partner’s name going forward.
Individual Financial Records
Once you have closed the account, you can start creating your own financial history. By doing this, you may well be able to prove that it was not you who caused the debt on the other accounts. It may be a good idea to get a credit card in your name and use it sensibly to build up your credit history. The more evidence you get to prove you are sensible with money, the better.
Pay the Mortgage
This may be extremely frustrating, especially if you are the one who has moved out and you have rent to pay too. But, if you do not pay the mortgage because it is in both your names, you will default, and this can affect your credit score and your ability to get a mortgage again in the future. Annoying though it may be, you need to bide your time. Remember that paying the mortgage from your individual bank account will appear in your financial records and may play into your hands come messy negotiations. Play the long game, do not let your emotions get the better of you. Also, if children are involved, you need to have their well-being as a top priority. It is not their fault that you are getting divorced. So, possibly forcing foreclosure on the house they live in is not a good idea. Think about what you will do with the house long-term, sell it, and split the profits, or one of you buy the other out. Knowing what you want to do in this regard will help make the divorce process smoother.
Do not Hide any Assets
It may be tempting, but this is a big no-no. Getting caught trying to hide away any assets can land you with big fines to pay, some penalties, and not to mention the loss of credibility you will suffer from with the court. Unfortunately, things have a way of rearing their heads when the battle begins, so be honest from the start about your assets, and this will actually have the converse effect of protecting your finances, and keeping the length of the divorce down. It may be worth using a genuine trust to protect any assets, but they need to be above board and easy to explain in court. It is worth looking into this, but ensure you do your research and get the right advice. It also helps if you know the value of all your assets. So, think about having everything appraised so you understand what values you are looking at. Besides, this is another way to speed up the divorce process.
Change Your Passwords
This is a pretty simple step that can be easily overlooked, but you must change all your passwords. Start with the financial ones first, such as the bank and PayPal. It is possible that you may have your account opened by your soon-to-be ex-partner and having your money spent. This may be like second nature to them, and they may think nothing of doing it, or it may be done maliciously, and it would be very hard to prove, depending on what was bought, so don’t leave the door open., also, change passwords for emails and anything else too. Often password resets go to email accounts, so be careful.
Watch Your Credit Score
Things do not happen overnight. After you have actually managed to close down the joint bank account, it may still take a further few weeks to several months to actually update. It is a wise course of action to check your credit score during this period to ensure that everything has been severed. It is also a way to get a head-up about any financial loan, or other forms of finance, that your partner has set up on both your names without your prior consent.
Think Logically and Stay Calm
This may well be the most difficult part of the entire procedure. Divorces can get hurtful. They can test your feelings and your emotions. You may want to stand up and scream and say it’s not true, etc., but this is the exact opposite of what you need to do. You have to find ways to reduce the stress and stay calm. It may be an idea to go to some medication classes or even undertake something like yoga which can help you relieve stress. Things are going to come out that you do not want to hear, so you need to prepare and find your inner calm. Your ex may do everything they can to make you lose it, but by staying calm, you will inevitably end up frustrating them, and that is a massive win. If you feel you do not want face to fae negotiations as this may be too difficult, why not see if you can have a Zoom meeting. Since Covid-19, remote technology has improved and given rise to the ability to conduct affairs this way.