Most people would say that divorce is not a walk in the park. Even when it's for the best and you manage to have a mutual consent, no-fault divorce, it's still stressful on all parties involved. It's hard emotionally and it's hard financially.
When you're in the midst of a divorce, it can be all too easy to make a financial mistake, especially if you've never been through a divorce before.
But with a little education and guidance, you can avoid making the common financial mistakes made during divorce, and you can save yourself a lot of heartache and money in the long run.
Here is our advice:
1. Get out of the dark.
Often, duties are divided in a marriage. One person does the cooking, dishes and dusting, while the other does the laundry, shopping and finances. If you're not the household's CFO, it's time to get out of the dark.
You need to familiarize yourself with all of the bills, including the mortgage, auto insurance, credit cards, and utilities. If you don't have access to these passwords, you need to get it.
2. Make copies.
Once you locate all of the household accounts, next you need to make copies of all of the financial documents, including the taxes, mortgage loan documents, credit cards, retirement accounts, investments, bank accounts, and insurance policies.
3. Review all joint credit accounts.
The best way to do this is to pull your credit report and your spouse's (if possible) from the three bureaus: TransUnion, Equifax and Experian. Next, notice which accounts are strictly in your name and which ones are joint.
For joint accounts, if the debt is assigned to your spouse in the divorce and they don't pay it, you can be held liable, despite what the divorce decree says. If your spouse is an authorized user, have their name removed. If you can afford to, pay off and close joint accounts, or at the least, have the account frozen so your spouse can't max out the line of credit.
4. Prepare a budget for single life.
When a couple splits up, their expenses double as they go from supporting one household to two; this often puts a financial strain on the family. The best way to prepare yourself is to create a budget for when you're living on your own – this way you know where to cut corners and whether you need to increase your income.
For more advice, reach out to a Pennsylvania divorce attorney from Cairns Law Offices!