As the festive season gives way to the post-Christmas comedown, divorce season moves up a gear. Lawyers say that the first working Monday of the year traditionally sees a surge of divorce enquiries.
However, what is just a date in the diary for the lawyers can be an incredibly stressful time for couples going through the trials of a split.
When you start the legal process, you can feel there’s already enough to worry about, keeping on top of the legal and emotional ramifications. But it’s important not to let your finances fall by the wayside.
Here are five steps you can take right now to help protect your finances.
This article isn’t personal advice. If you’re not sure if something is right for you, ask for financial advice.
Draw up an emergency budget
People often run up debts after a split, because they’re dividing the same income between two households – while at the same time paying for what can be an expensive process.
It makes sense to draw up an emergency budget to cut your non-essential expenses as much as possible during these first difficult months.
Talk to your ex about the mortgage and other joint debts
If you’re both named on the mortgage, then you’re both liable for the full amount.
So, to protect your financial position you should try to maintain payments until the divorce is finalised. If possible, try to agree this between you.
If your ex refuses to pay their share, or you’re struggling to pay yours, talk to the mortgage company. They might allow you to pay interest-only for a period, or take a payment holiday while you sort something out.
Think about joint accounts
If you’re being paid directly into a joint account, arrange for the money to be paid elsewhere.
If there are bills, rent or the mortgage coming out of the joint account, arrange an alternative way of paying these.
Tell the bank holding your joint account about the split and they can make arrangements so you both have to agree to any money being withdrawn.
Similarly, they can place controls on overdraft arrangements to prevent either of you from abusing joint arrangements.
Check your credit cards
There’s no such thing as a joint credit card. If you both have a card on the same account, one of you will be the primary card holder, and the other has an additional card.
If you’re the primary card holder, you’re liable for spending on both cards.
If this is the case, it’s sensible to block both cards.
If your ex is using the card for everyday expenses, they need to know as soon as you’ve done it, so they can find an alternative.
Get to grips with the value of what you have
The divorce process involves dividing your assets, so you need to understand the value of it all.
This includes pensions.
In many cases, it’s one of the biggest assets built up during the marriage – sometimes largely in the name of one person. Couples can offset assets, but it’s important to appreciate the value of what you’re giving up and what it will cost to replace it.
It could be worth speaking to a financial adviser as well as a lawyer. This comes at a cost, but if they set you on the right course, it can repay itself several times over in the long run.
If you need help to get your own financial future on track, or you simply don’t have time to do it yourself, our expert financial advisers can help.
It all starts with a call to our advisory team.
While you won’t get advice on this initial call, it’s an opportunity to learn more about the service, including charges. If you’d like to continue, they’ll then put you in touch with an adviser.