Planning your finances after divorce
When you make the decision to divorce the realisation that you will need to manage your finances on your own may be daunting at first. However, by keeping calm and taking things step-by-step, dealing with finances after divorce doesn't have to be overwhelming. Take a look at some of the first things you can do to get back on financial track after a divorce.
Plan in advance
When you decide to get divorced, it's important that all financial details are set out and agreed to. These include such items as maintenance for a spouse, maintenance of children, how money and savings will be divided, what happens to the marital home and other assets, and how pensions will be shared. Today, it's quite common for people not only to plan how they will divide their finances in the event of a divorce, but often these plans are made before they even get married, by writing a pre-nuptial agreement.
Dealing with joint debts
If there are any joint debts with your ex-spouse, then it's very important to deal with them. If the debts are in joint names then creditors are entitled to pursue either party for them so you could be chased for debts that your partner has accrued.
Dealing with joint accounts
If you have joint accounts together, then these also need to be divided but do this with a certain amount of caution. You will need to ensure that the other party isn’t accessing a joint account for their own purposes, but you should also avoid telling your bank that there is a dispute, as the bank could freeze the account. You will also need to deal with mortgages that are under joint names; for instance if payments will be the responsibility of just one partner in the future, then the contract should be changed accordingly.
Plans don’t get resolved overnight
However well you plan your finances, divorce settlements don’t happen overnight. It can take time after the divorce before everything is straightened out, financially, plus if you are selling your home, this may also take longer than you expected. The best way to prepare is to ensure you have money set aside to get you through this uncertain period after your divorce.
If your ex-partner took control of the day to day living costs of the household during your marriage, then now is the time to get to grips with them yourself. 75% of those we surveyed will need to seriously assess their finances after their divorce A good place to start is setting yourself a budget that takes into account your income and out-goings. You may find that you need to make a number of compromises in the beginning, but this should prevent you from getting into debt, and help you to gain financial stability.
Maintenance of your children
The divorce agreement will have stated how your children will be maintained, by detailing how each parent will contribute financially to their upbringing, however a quarter of divorcing parents are also worried how to maintain a child as a single parent. Circumstances tend to change, for instance, either of you could remarry in the future, which could bring about having to support another family or partner financially as well. Either parent may need to take a pay cut or job change in the future for example, which may alter how much you can pay towards maintenance. If this happens then you should consult with a solicitor and/or the Child Support Agency (CSA) who will be able to help with any changes regarding maintenance payments.
Following your divorce, your situation regarding state benefits might change. If your income has been lowered then you might be entitled to additional benefits, such as Council Tax Benefit, Income Support, Jobseeker's Allowance and Tax Credits. If prior to your divorce, you were claiming Tax Credits, you are obliged to tell the Tax Credits Office that you have become divorced.
While getting a divorce is an important step towards your new future, you may find that there are still some unexpected hurdles to face. Don’t think that you have to cope entirely by yourself; there are people who can help you get back on your feet. QualitySolicitors has also recently launched a pilot mentoring scheme for divorcees, which you may also find beneficial.
If you feel that you would like to talk to a solicitor then you can find your local QualitySolicitors here.