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Financial mistakes to be aware of in your divorce

by | Dec 3, 2021 | Finances And Divorce |

As we often point out to our clients, the emotion you feel in a divorce is very real and very present, but ultimately, a divorce is a legal agreement that has financial implications that last well into your post-divorce life. You want to make sure, when you’re going through a divorce, that you’re mindful of the effects of a divorce on your post-divorce life, and that you take the steps to make sure you’re ensuring the best possible future for yourself. That includes not making money mistakes during your divorce that might derail that.

We recently came upon an article that dealt with the top ten mistakes that people make when they’re getting a divorce. To us, 10 feels like a lot to talk about, but we’ll take this opportunity (and the next one, for a two-parter) to talk about the items that jump out to us the most. There are some good reminders in here that emotions can sometimes make people forego good choices for bad ones, but that it’s important to be mindful of the need to make good choices in your divorce and beyond.

The first one that jumped off the screen to us was the need to protect your credit score — interestingly, it’s the first one that the article listed. Obviously, a credit score is your key to how you’re able to borrow money in the future, and one of the biggest adjustments in post-divorce life is going from being a double-income to a single-income household. Opening new accounts and even initiating inquiries into new accounts can impact your score.

Also, as the author of the article notes, “For many couples, divorce isn’t just about dividing assets – it can also require you to divide your debts, such as unpaid credit or outstanding mortgage payments. There’s nothing worse than worrying that your ex-partner hasn’t paid off their share once you’ve separated. Legally, you’ll still be responsible for each other’s portion of the debt – even if you’ve agreed to split it equally between you.”

If there’s a way to pay off debts before a divorce is finalized, that allows both you and your ex a cleaner slate — and one less thing to harbor anger about once you’re both on the other side of your divorce.

Similarly, you want to make sure — as tempting as it might be — to not spend large amounts of money while the divorce is going on. And, if your spouse is doing it, it’s something you want to bring to your lawyer’s attention.

The author observed, “Any unusual spending habits in the run-up to your separation can be viewed unfavorably by the courts.” It’s a time for many divorcing couples, after all, in which child support matters are being settled. If you’re trying to make a case that you can’t afford a certain level of child support, and then you’ve bought a new car, that might work against you.

Similarly, you don’t want to make any changes to your finances that might arouse suspicion. The article noted that as changing the beneficiaries of your life insurance or making adjustments to your will. That’s something that could potentially be part of your decree, and it’s certainly something you can tackle once you’re on the other side of your divorce. The author warns, “Taking your divorce and finances into your own hands and making these changes yourself will not go down well. It could even put you at risk of a criminal contempt charge.”

If you’re unsure what steps you can and can’t take, it’s a good idea to talk to your lawyer to know what moves could help or hurt your case. At the Law Office of Lisa A. Vance, we take the time and care in our meetings with you, starting with the initial consultation, to make sure you’re aware of what will best help you secure a happy post-divorce future for you and your children.

 

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