When people contemplate divorce, their foremost concerns center on child custody and support and finances. As far as finances are concerned, there is a lot of room for error during divorce proceedings. The problem is that divorce has a way of taking a perfectly rational person and making them do irrational things.
When a spouse makes an error in judgment and it has to do with money, they can end up paying for it for years after the divorce. Don't let that happen to you. The good news is, divorce doesn't have to mean your credit will be destroyed, nor does it have to lead to financial ruin. You just have to be smart about it.
If you're headed for divorce, we suggest that you heed the following financial advice. Once your divorce is over, you will be glad that you did!
1. Refrain from hiding assets.
Hiding assets is not acceptable during a divorce. You will be required to be upfront about your income and assets in your financial disclosures. If you hide or transfer assets just before or during your divorce in an effort to keep your spouse from getting their share, you can bet the court will find out about it and it will not turn out well.
2. Order a copy of your credit report twice.
If you've been in the dark about your finances until now, if you've been the "out spouse," it's time to face your financial situation head-on. Run your credit report as soon as possible so you know exactly what you owe, how many accounts you have, and which accounts are "joint." You also want to run your credit after the divorce to ensure that any changes are accurately reported.
3. Close or convert joint credit accounts.
If you have joint accounts with your spouse, close or convert them to one spouse's name as soon as possible. The last thing you want is your spouse going out and running up a ton of credit card debt without your knowledge, debt that you will be "on the hook" for.
4. Make a post-divorce budget now.
You must know how much money you will need as a single person. You want to sit down and create a detailed post-divorce budget. This way, you can be proactive about your financial situation. You may discover that you need to cut down on expenses, find an affordable place to live, or find a higher-paying job.
5. Cut your financial ties.
If you can afford to, you want to cut all financial ties with your soon-to-be ex. If you have joint credit cards, you want to follow the above advice. If you have auto loans together, refinance the loans so the vehicles are in each respective spouse's name. Pay off all marital debt if at all possible, before the divorce is final.
6. Get a P.O. Box now.
While you're still living together, the last thing you want is your spouse opening your personal mail, and you can't entirely control that as long as your spouse's name is on the mortgage. What's more, you don't want your spouse reading letters from your divorce attorney. That said, you should get a P.O. Box and have all of your mail re-routed there.
7. Seriously consider selling the marital residence.
When divorcing spouses own a home, usually their best option is to sell the home and split the proceeds, assuming there is equity in the property. If you desire to keep the home, make sure you can qualify for a mortgage in your name alone and the payments. You may be better off selling the house and moving into a smaller, more affordable place.
8. Opt for a collaborative divorce instead of litigation.
Collaborative divorce is definitely more cost-effective than divorce litigation hands down. Collaborative divorces are faster, less stressful, and less expensive than contested divorces. Plus, the spouses maintain control instead of leaving their children and their assets in the hands of a judge who does not know them personally.
Looking for a Columbia divorce lawyer? Contact our officeto schedule a personal case evaluation with an experienced member of our legal team!