Divorce can be stressful for many reasons, but the financial changes it creates may be especially frightening. Splitting assets may leave you with much less flexibility in your budget after the divorce is final. You might also worry that your spouse will start to rack up debt in the meantime to retaliate against you.
To protect yourself from messy financial disputes and to prepare for your new life, you can take action in the early stages of divorce. Although it might take some time and energy, completing a few key steps can save you from debt in the long run.
Even if the divorce seems amicable now, it may turn ugly quickly. It’s likely that you and your spouse held joint accounts and credit cards during your marriage. An angry spouse might drain these resources or use debt against you.
Now is the time to open your own bank accounts and start routing your incomes and automatic payments independently. As for the previous accounts, you should ask your attorney if you could place protective measures on withdrawals. Later in the divorce process, a judge can divide the marital assets in your joint account. You can also freeze shared credit cards so that your spouse cannot gain debt under your name.
Documentation of your finances will not only help you budget for your future, but it will inform the courts how to fairly divide marital assets. Gather tax returns, mortgage statements, your credit report, property appraisals and insurance policies. Keep both physical and digital copies on hand.
Update personal security
It’s always best to refresh your personal security every few months, but you could be at a higher risk during your divorce. Not only could your spouse access your financial data, but their family or friends might as well. Change your passwords and even apply for new credit and debit cards to keep your information private and secure.