The Three Financial Questions To Ask Yourself During a Divorce

Undergoing a divorce can be upsetting and stressful, but it is often made worse when you don’t know the facts and aren’t prepared for what’s to come. If you want to make sure you’re in as strong a financial position as possible after your divorce is over, then it is imperative that you consider the following three questions.

It’s important to remember throughout divorce proceedings though, that communication is vital. If you and your spouse can agree on some of these questions in advance, then the process itself will likely be less painful and complex.

Financial expert and Editor of, Hannah Maundrell, said: “Discussing money with your ex may not be an option, but if you can talk things through then it will make life a lot easier. That said, it’s vital you know your rights; you’ll continue to be responsible for repaying joint borrowing, and you’ll both be able to access money in joint accounts.”

If you’d like to know more about this then read on, and ask find out what questions you should be asking…

Do you have any debts?

When you make the decision to file for divorce, there are three main elements that will be considered, and your debts is one of them. First of all, any shared debts, such as overdrafts on joint accounts or joint credit cards with outstanding balances, will be taken into account. Both of you have a legal responsibility to pay them off, but lenders can be understanding if you explain your current circumstances.

Telling your lenders about your divorce proceedings will give you the chance to show that you do intend to pay it back, and they may be able to temporarily freeze the interest or come up with a new repayment structure. However, you will not be able to close down any shared or individual accounts until they have been brought into credit.

It may be the case that you have shared debts that are only in your name. For example, you may have a personal credit card debt that’s the result of a new family car. Legally, however, these are your responsibility alone, even if your ex-partner had a part in accruing the debt. It may also be the case that your ex is unwilling to contribute, in which case you may need to prove that the spending was for both of you. In this instance, a legal advisor will be able to help you to work out what you can do, but in the short-term, consider transferring the amount owed to an interest-free card.

Further commenting on this, Hannah Maundrell, added: “As a general rule, debts taken out in joint names will continue to be the responsibility of both parties, and so both will need to ensure that repayments are met in full and on time. The exception is credit cards, where additional cardholders do not share responsibility for the balance and repayments – this sits with the primary cardholder.

“Those taken out in sole names before a couple combine their finances will continue to be the responsibility of the person that took them out (unless they get their partner added). The above will generally hold when it comes to divorce; however, in some instances the courts will take both pre-marital debts and those taken on during the marriage into consideration when they’re dividing assets and allocating maintenance payments.”

Have you listed all your assets?

After they’ve taken your debts into account, the courts will then move onto your assets, referring to any items that you own or money stored in accounts. They will assess not only your assets and joint assets, but also individual bank accounts and credit cards.

When you start divorce proceedings, or even beforehand, make sure you go over all of your accounts, savings investments, and so on. If you own your home for example, you can get it valued for free so that you can compare the value with the remaining balance on your mortgage. You’ll be able to get an almost-instant idea of whether you would make or lose money on selling it.

As well as accounts and property, you must also list the values of any expensive items you own. Cars, jewellery, or musical instruments may be considered by the courts, but assets

brought into the marriage are not usually considered. For example, if you sold a house so that you could buy a joint home, those assets shouldn’t be taken into account by the system. Also, if you have already made a will which references your spouse, you may need a legal advisor to amend it along with an explanatory ‘statement of wishes’ addition.

Have you taken your lifestyle into account?

Finally, the courts will debate your lifestyle. To begin with, they’ll consider any children. If you own your own (or joint) home, it’s very likely that the property will be given to whichever of you has the stronger relationship with the children. Even if the home is in your name alone, it could still be awarded to your spouse.

After separation, you will need to start managing your finances as an individual, and it’s very important here that you keep detailed records of what this new lifestyle is costing you. For example, note how much bills are now costing you, house payments and so forth. If you have this at your disposal, you might be able to use it as evidence for benefits eligibility, such as child maintenance.

Once everything is under control, you have demonstrated that you no longer live with your spouse, and that all joint financial products have been closed down, the final process of ‘financial disassociation’ will allow you to separate your finances from your ex. Most credit agencies have an online form available on request for this, and it means that your credit rating will no longer be affected by your ex’s financial status.

So, what’s the next step?

If you’re getting divorced, chances are you’ve gone through the three questions we’ve discussed in today’s article. However, have you made that next vital step of consulting a solicitor?

This is absolutely crucial if you want to make sure that you know your rights accurately. Of course, there are plenty of online government guides, helpful walkthroughs and so on available if you want to read up on the law before coming to see one of our experts. If you want to have a brief idea of the figures, there are even divorce calculators available, but don’t think that that’s all you need.

Divorce law is full of confusing terminology and changing policies, so by getting in touch with us, you’ll be able to have all your questions answered, but also remain safe in the knowledge that you haven’t misinterpreted anything vital.

At Hylton-Potts, we completely understand what a distressing time this can be without all of the financial pressures and uncertainties involved. This is why we’re here to help you work through it all with a friendly and professional approach, so don’t hesitate to get in touch by calling us on 020 7381 8111, or via email at [email protected].

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