Working out financials can be tricky when going through the divorce process. If you have been with your spouse for a while it is likely that you have shared debts, expenses and even shared bank accounts. Many couples choose to merge finances when getting married which can make things difficult when trying to navigate financials during separation.
Here are a few options on how to deal with joint debts and bank accounts throughout the divorce process.
Close any joint bank accounts
This is an important step especially if you don’t know how the divorce process is going to go emotionally. If you don’t close joint accounts, you will both have access to the money in the account and be legally responsible for repaying any debts. This is the case even if your separation agreement says only one person is responsible for debts or can access the funds in the account. This is key if one of your goals is to have complete financial separation from your ex.
Keep a joint account open
Depending on your situation you and your former partner may wish to keep a joint account open for a period of time. For example, if your mortgage payments are coming out of a joint account and you are still both the owners of the property you may want to leave it status quo for the time being.
If you are leaving a joint account open it is a good idea to get advice from a lawyer or help from a mediator. They can help you create a formal agreement about how much money each person needs to deposit each month and what bills will be paid from the joint account.
You can always work with your financial institution to help you manage a joint account. For example, you can make it a requirement that both partners must approve any withdrawals.
Know all the details about the joint account
You may have signed a form when you opened your joint account saying that you don’t want to receive updates about the account from your financial institution. Now that your situation has changed you may want to have them send you bank statements and other information about it.
It is important to ensure you know all the key information about your bank account if you are going to continue sharing it with your ex for any length of time. The key information about joint bank accounts and the risks and benefits of sharing an account should be available on your financial institution’s website.
Get rid of joint credit cards
If your former partner is an authorized user on your credit card, make sure to remove them from the account. If you don’t, they will be able to continue using it and you will be responsible for any money owing on the card.
If you are a co-borrower on a credit card with you ex, make sure you cancel the account. As co-borrowers you both have access to the card and are equally responsible for making payments. Unlike a joint account there is no real reason to continue to be tied to your former partner through a credit card and it can also be very dangerous if things go south throughout the divorce process.
Getting advice when it comes to managing your finances during divorce is always a good option. Feel free to contact me at [email protected] for more information.