Divorce – Dividing Finances 101
One of the most challenging parts of a divorce is when you have to divide the finances between you and your spouse. For instance, when you or your partner has debts or other types of bills you share, you may not know how to split them. Here is a simple guide, which will help you understand the nuances of dividing finances during a divorce:
What should you do during a divorce?
When you have to deal with a divorce, the first thing you need to do is get your finances in order. In other words, you need to establish your personal and joint assets. Here are a few steps you need to follow to organize all your finances:
Ensure all your documents are in order
First, make a note of all the financial institutions you have an account with, such as investments, insurance, loans, savings, and credit cards. For each account, you need to have all the documents. For example, you need to have statements for your investments and loans, tax returns, and latest pay stubs, to name a few.
List out what you own and owe
Once you have the documents in place, the next thing is to take a look at what you own and owe. By following this technique, it becomes easier to divide the finances with your spouse. Joint accounts, investments, and insurance policies are some of the assets.
Similarly, credit card debt, personal loan, student loan, mortgage, and auto loan falls under what you owe, both as an individual and couple.
You will be held responsible for making payments for all the debts which are under your name. Even if you take a line of credit in both you and your spouse’s name, the financial institution will expect you to repay them on time. However, you can work with your partner to come to an understanding on how you can make the payments together.
However, if you have joint credit cards, it is vital that you remove your spouse from them immediately. Even if you are the co-borrower in this situation, you can still cancel the card. You will face numerous challenges when undergoing a divorce, especially when it comes to dividing your finances. To ensure that your rights are safe in this situation, it is always better to hire the services of a lawyer. He/she will have the expertise to handle this situation, with minimal.