31st Jul 2014
Debt is a stressful topic on its own, but add in divorce and blood pressure can shoot up extremely quickly. If you’re thinking about divorce or if you are in the middle of one, taking care of your finances should be a top concern. Issues relating to debt are often especially difficult, so make sure you know what to do to protect yourself and your money.
To help you, here are four tips to keep your debt situation under control during a divorce:
1. Make sure you’re in control of future charges
If you know a credit card or other account is in your name, be sure you have possession of the card or otherwise make it so only you can charge to the account. If you don’t know whether an account is in your name or not, find out as soon as possible. Sometimes a spouse will rack up charges on the other’s credit card when the relationship goes south, so it’s a good idea to cover yourself.
2. Know all of your accounts
This ties into number one. Know which credit cards, loans, or other debt belongs to you and which belong to both you and your spouse. This knowledge will go a long way in preventing surprises down the road. Even if you don’t end up going through with a divorce, it’s still something that should be checked up on regularly.
3. Pay off or transfer as much outstanding balance as possible
Paying off debt before the divorce process starts can keep financial worries at a minimum. If you can’t pay it all off, pay off as much as you can. If you and your spouse agree to split a portion of joint debt, transfer your share of the balance to a separate account that only you have access to, just to be sure.
4. Close loopholes
Making backups of your paperwork, agreements, and other documents can prevent future problems. It’s also a good idea to include a provision that exempts joint debt from bankruptcy, just in case your spouse declares bankruptcy in the future, leaving you with the remaining share of joint debt to pay off on your own.
Are you prepared for the financial headaches that come with divorce? If you’re not 100 percent certain, contact us today. Our divorce attorneys will give you all the information you need to protect yourself and your money at any stage of the divorce process.