The financial aspects of a break-up can often be a significant source of stress. After the initial decision to separate or divorce, there are many other decisions you and your partner will have to make. For instance, you will need to decide who will pay family debts and expenses, how much support, if any, will be paid, and how you will divide family property.
Here are a few things to consider as you move through this difficult time:
(1) Take stock of your financial information. When you separate or divorce, it is a good idea to make a complete list of the assets you own jointly or separately, as well as your debts and expenses. Write down the names of your financial institutions and account numbers for your chequing and savings accounts, credit cards, loans and investments. Make sure you have copies of important financial information, such as current statements for outstanding loans, recent pay stubs and your tax returns for the past three years.
(2) Keep bills and receipts. While you are working out your separation or divorce, keep bills and receipts for expenses related to your family. This information will be helpful later on when you are working out how to divide your property.
(3) Establish your own accounts. Open your own chequing and savings accounts and establish your own credit, if you haven’t done so already. Update your direct deposit information for paycheques, government cheques and any other regular payments you receive to ensure they are deposited to your own account.
(4) Joint assets or debts. Decide right away what to do about any joint assets or debts you share with your partner. Joint assets or debts include chequing and savings accounts, credit cards or lines of credit. It’s a good idea to contact your financial institution for advice on how to protect your interests in your joint accounts, such as preventing further borrowing from a credit account or withdrawals from a joint bank account.
(5) Check your credit report. Once you have closed joint accounts or paid off joint loans, check your credit report to make sure your financial information has been updated. Keep in mind that many financial institutions provide information to the credit reporting agencies every 30 days, so check after a couple of months.
(6) Make sure you have a credit history. If most or all of a couple’s accounts and bills were registered and paid under one spouse’s name, the other spouse may have a low credit score. It’s a good idea to take steps to build your credit history so that you have more financial options. For instance, it’s important to have a credit history if you want to apply for a credit card or a mortgage. In addition, some landlords and employers may check your credit history before considering you for an apartment or a job.
(7) Seek legal advice. Each situation is unique. It’s a good idea to get advice from a family law lawyer on the best way to handle the financial aspects of your separation or divorce.