If you are considering divorcing your spouse, you are likely dealing with a bevy of emotions. While your emotional happiness is certainly a vital factor to weigh while determining if you should divorce or not, you also need to consider another important factor – your personal finances. Before you make the final decision to divorce, make sure you are financially ready to divorce.
Due to the fact that many married couples have combined finances, or at least a joint credit card, splitting up financially during a divorce can be tough. If you are considering divorce, there are a few steps you need to take to ensure that you will be financially sound moving forward.
Gather All of Your Important Financial Documents
Before you initiate the divorce process, you need to gather all of your important financial documents. This includes tax returns, stock or investment statements, bank statements, pay stubs, and year-end reports from each of your credit cards. You will need these as you start the process of splitting your finances from your spouse’s, and it will be much easier to track them down before you get too involved in the divorce process. Air on the side of caution, and put the documents somewhere safe and preferably secret. Nobody wants to image that their divorce will get ugly, but they often do, and having your important documents hidden will provide peace of mind. Consider leaving them with a family member or close friend, or even paying for a safe or safety deposit box.
This is also a good time to review your shared finances. If you were uninvolved in the finances during your marriage, now is the time to start building an understanding of the assets you and your spouse have. Make a list of all of the assets you and your spouse share: investment properties, retirement accounts, etc. The more knowledge you have of your financial situation, the less likely your spouse will be do try to hide any assets from you during the divorce. Additionally, if you did not handle the finances while married, you need to start learning how to manage money, as you will soon be financially independent.
Check Your Credit Score
We are all impacted by our credit score, so it is important that you understand yours before moving forward with your divorce. A good credit score will allow you financial freedom after divorce. You will have the ability to buy a new car, rent or purchase a home, and qualify for a mortgage. A bad score, on the other hand, will make life as a recent divorcee more difficult. Before you initiate the divorce process, pull your credit report and review everything listed. Now is the time to clean up any errors on the report, and start keeping your eye on any joint credit cards that you and your spouse have together. Again, we all hope for an amicable divorce, but it is much better to be safe than sorry, especially when sorry could mean your financial future is jeopardized.
Once you and your spouse begin the divorce process, you should consider closing your joint credit card accounts, or shifting the ownership of each account to just one of you. This will ensure that the financial decisions that each of you makes will not impact the other into the future. Credit card companies do not typically care about divorce, and if your spouse racks up debt on a card that you are named on, you could be held responsible for the debt in the future.
Open Your Own Accounts
When you and your spouse were first married, you likely made a decision on how your finances would be handled. Most couples choose to either marry but keep separate finances, or combine them at the time of marriage. It can be difficult to determine which spouse has contributed to each account over the years, making the separation process challenging. Additionally, with a joint account, you are at risk if your divorce turns sour, especially if one spouse removes all the funds from the account or removes the other spouse’s name.
Once you have decided that divorce is the next step in your life, open up your own bank account and credit card accounts as well. This will make the asset division process much less complicated, and will also provide peace of mind to both spouses that their assets will not be touched. Experts also recommend building up a small emergency fund, just in case.
Divorce is a complicated process, and you will need help along the way. In addition to a skilled divorce attorney, you should look into hiring a financial advisor or accountant. There are many important financial decisions to be made during the divorce process, and your decisions may impact you for years to come, so it is important to have an advisor present during all decision making. Divorce is an intense process, and it can be easy to make a rash decision in the heat of the moment. A financial advisor will help you make choices that will benefit you in the present and the future. An advisor can also help you with any of the above steps, and they are a great resource to turn to for those who lack financial understanding.
If you are facing a divorce, you need the help of a qualified DuPage County divorce attorney. The team at Abear Law Offices has handled a wide variety of divorce cases, and is available to assist you today. Deciding to divorce is one of the most difficult decisions a person can make, and our skilled attorneys are here to help through every step of the process. Call (630) 904-3033 or visit us online to learn more about our services, and to schedule your consultation with a member of our team today.