If you are going through a separation with your spouse, it is crucial that you know which steps you must follow to sort of your finances. This can be a huge source of stress and contention during a breakup, which is all the more reason to get this information as soon as possible. These tips will help you to get through this very difficult time in your life without having to worry about losing more than you need to.
Decide How to handle your Separation
While solicitors are typically used in a divorce, this is not the case with a simple separation. It is, however, still important that you get the necessary legal and financial advice. It is especially important to speak with one of these professionals if you and your ex can’t agree on what to do with your debts or the home you lived in together.
There are a couple of different ways to go about approaching a separation. You can choose to speak with a solicitor, which is the best course of action if you believe they will make a claim against you. There is also a mediator, who can help both of you to reach a consensus on your finances.
It is always best to not involve a solicitor so you can save as much money as possible. Hiring one of these professionals is usually very expensive and can extend the entire process considerably.
Look at Your Finances Together
You will need to sit down with your ex-partner and come to an agreement on various aspects of your finances.
We highly recommend that you follow these steps:
• Write out a list of all your possessions and any money you might owe to creditors. This includes the total amount in your savings account as well as your home equity. While the person who owns the asset is usually entitled to keep it, the other person can still make a claim.
• You might want to use a professional if you aren’t sure what your assets are worth. If you are unsure about the value of your home, you can always speak to a real estate agent to get this information.
• Start talking about how you want to divide up your assets. You will also need to determine who will be responsible for paying which bills and debts. If you have a joint bank account, you will have to determine how much you and your ex will each get.
When You Should Turn to a Financial Adviser
There are certain circumstances in which it is a good idea to hire a financial and perhaps legal adviser during a separation with your spouse. If you have taken out a loan on behalf of your partner that they aren’t willing or able to pay, this sort of assistance is necessary. It is also a good idea to seek help from a professional if you do not own the home but plan on filing a claim for it anyway. If you have a joint mortgage, working out the details can be tricky. This is another situation that requires the help of a legal or financial expert.
Paying Legal Fees
If you are in a situation where you need to hire a solicitor, there will be some fairly steep fees that you’ll likely need to pay. It is important that you take the time to consider your options as to how you are going to pay these fees.
• Zero-percent interest credit card: You should consider getting a 0% interest credit card to cover some or all of your legal fees. You won’t have to worry about paying any interest for the agreed upon period of time.
• Personal loan: Some people actually take out personal loans to pay for legal fees in a separation or divorce situation. You will have to make fixed payments each month until the full amount of your loan is paid off. Make sure to look into some of the different lenders before selecting one to borrow from.
• Credit unions: A credit union is typically the first place you should go when you need to borrow money. These financial institutions can only charge up to a certain amount of interest by law.
Talk to Your Mortgage Provider
One important aspect of protecting your finances during a separation is to get in touch with your mortgage provider. You just have to tell them about your situation and explain that you might have difficulty making future payments. If you happen to have a joint mortgage, you will both have the same amount of responsibility for paying back the loan. There is a good chance that your lender can work with you in some way, so it is a good to be honest and straightforward with them.