When it comes to divorce, there’s much to consider and there’s a lot to worry about. In our experience, divorcing couples are most concerned about child custody (where applicable) and property division – you can probably relate. Many divorce lawyers believe that if severing financial ties were easier, unhappy spouses probably wouldn’t delay a much-needed divorce as often as they do.
If you’re getting a divorce and you’re concerned about your finances, join the club. Money is a very sensitive subject and spouses don’t have any desire to end up bankrupt, penniless, or with their credit ruined following a divorce. If you’re nervous about your financial future, you have plenty of company. Divorce horror stories aside, it is possible to protect your assets and your credit during a divorce; however, you’ll need a good attorney to advise you along the way.
Without going into too much detail, we’re going to provide a brief overview of finances during a divorce. Here is a list of issues you need to take into consideration, as well as some advice on how you can protect your finances during the divorce process.
1. Get out of the dark about your finances.
How much do you know about finances in your marriage? If your spouse has been paying the bills and handling all of the money, it’s time to get out of the dark. You need to know about all financial accounts, and you need to know their passwords and balances.
2. Run two credit reports asap.
As soon as possible, run a copy of your credit report and a copy of your spouse’s if he or she will let you. Scan over the credit reports carefully to be sure you know exactly what you both owe and to whom. Also, pay attention to separate and joint accounts.
3. Take action on joint accounts.
When you get a divorce, it’s best not to have any joint accounts by the time the divorce is over. If you and your spouse are on credit cards, auto loans and the mortgage together, this is not an ideal situation. We recommend paying off all joint debts (if possible), closing the joint accounts or moving them into one spouse’s name alone.
If you stay on a joint account after the divorce, you are RESPONSIBLE for that debt, regardless of what the divorce decree says. For example, if your spouse agrees to pay on their auto loan and your name is still on it after the divorce, and your spouse loses their job and falls behind, the creditor will go after you for payment. Ideally, you want to end the marriage with a clean slate and with zero joint debt.
4. Consider selling the marital home.
If you’re emotionally tied to the marital home, don’t let your emotions get the best of you. Depending on the value of the property, how much you owe, and your ability to finance it in your name alone, it may be best to sell the property and split the proceeds with your husband or wife. Too often spouses treat the house as a “prize possession” but it makes no sense to keep the house, especially when they become house poor.
5. Create a post-divorce budget today.
It’s important to create a post-divorce budget asap. The decisions you make today can affect your financial health as a single person. For example, if you’ve been a stay-at-home parent, you may need to go back to work. It’s better to get the ball rolling rather than wait and see what happens. If you’re the higher-earning spouse and expect to pay spousal or child support, you may need to find ways to increase your income. Perhaps it’s time to apply for that promotion or start that side gig you’ve been dreaming about.
If you’re looking for a Las Vegas divorce lawyer, don’t hesitate to contact Leavitt Law Firm to schedule a consultation. We’d be glad to answer your financial questions to help put your mind at ease. Call (702) 996-6052 to get started!