Whether it comes before or after the papers are signed, economic hardship is all too familiar to many couples who divorce. Following a few financial guidelines can ease the burden during this difficult time.
1. Accurately assess debts and liabilities.
Firstly, take a note all of your existing shared and individual liabilities. Discuss how you’ll allocate these responsibilities. You can even get a credit report from companies like Experian to see the bigger picture.
2. Plan on how to handle your home.
If you own a home, the mortgage is likely your most significant monthly payment. Be certain you understand how you’ll resolve monthly mortgage payments, and how you’ll divide the home’s value – whether one partner buys out the other now, or the home is to be sold after the children are grown.
3. Budget for payments.
Create a detailed budget, based on your new income level, and use any savings you have to pay off debts. Most people find the most efficient way to pay off debts is to first pay off smaller bills then pay off loans and unsecured debt, such as credit cards, beginning with the account with the highest interest rate.
4. Make sure your ex-spouse is making his or her payments.
If possible, make provisions in the divorce agreement for reporting on resolution of significant debt. There are important implications for you personally if your spouse does not meet his/her end of the bargain on liabilities allocated through the divorce proceedings. Also, speak to the bank about removing names from joint accounts.
5. Begin a savings plan.
It’s a good idea to focus on the future and a new savings plan. This could involve reinvesting any proceeds or equity that come out of the divorce proceeding, and can include building yourself a retirement fund for the future.
If you find yourself in trouble during this stressful time, feel free to reach out to Divorce Negotiator with your questions. We have good financial contacts and can help you through an amicable divorce.
Call 0800 177 7702 or email email@example.com.