How to Handle Your Finances During a Divorce

Whether your divorce is amicable or adversarial, one of the trickiest aspects will be money. Your best path forward is to both communicate and create distance. By identifying which of your bills are shared and which should be separated, you’ll put yourself in a better position financially.

The first thing to know is that closing accounts or freezing credit cards is a mistake that can cause problems for both of you in the future. If you want to separate your expenses then do so, but not until the cards are completely paid off.  Go to the bank and open a new account that is just in your name, and if you don’t already have one, apply for your own credit card too. Then talk to your spouse about which expenses the two of you should either payout of an existing joint account or should chip in for separately. Examples would be bills for mortgage or electricity or other utilities.  If an expense did not exist prior to the separation, it belongs to whichever one of you incurred it, but if there is a debt that is attached to both of your names you will be jointly liable. This means that if your spouse doesn’t pay their portion you will still be responsible for it, so make sure that you are monitoring accounts and that they are kept current.

Keep in mind that your financial situation is going to change dramatically. For some, that may mean greater financial independence and for others, it will represent a significant drop in financial stability. It is a good idea to wait before incurring any new debt until things stabilize.

Once you meet with a divorce attorney you will need to identify which of your assets are shared and which belong to you and you alone. This may not be easy and may even require litigation or negotiation. Assets will need to be assessed both for value and for who is responsible for expenses associated with them, and you will need to consider the impact of any distribution on each of your tax liabilities. Part of your divorce process will involve dividing either the assets themselves or their value.

The monetary aspects of your divorce can be significant stressors but working with an experienced attorney can make things easier. For information on how we can help, contact us today to set up a time for a consultation.