Dividing finances through divorce
- Posted on: Jul 17 2022
From a financial standpoint, a divorce could easily become a financial nightmare. With laws being different between states, the ability to divide assets equally may seem unattainable let alone difficult. If a divorce is headed your way and you want to make sure what to expect, then you should understand a few things about divorce first.
Differentiating Between Separate and Community Property
When you are considering divorce, it is important to understand how property is defined by your state. According to your state, the property owned during the marriage may be considered as separate or community property.
If the property is considered community, then it is property obtained as a couple, which means both spouses own half of the property.
For property that is separate, it includes property owned prior to a marriage taking place. So if a spouse brings property into a marriage which they owned previously, then they can retain control of that property during the divorce.
Splitting a Joint Bank Account
With finances and money saved in bank accounts, the average couple usually has at least one with both spouses as signers. Being able to situate the finances between spouses needs to be an important part of the divorce. You should have a complete list of accounts, whether they are joint accounts or not. Once you have all of the accounts accounted for, then you can begin to split the money from each one that is jointly owned.
However, you will likely need to wait until a settlement has been reached if the finances are unable to be split and bank accounts closed. While waiting, you should go ahead and open a new individual bank account for yourself.
It is important to know how many loans or credit cards your spouse has so that you know how much you will be responsible for. It will be a good idea to obtain your credit report to help identify them all. Besure to know if you are just authorized or a joint owner of the debt obligation.
It is a good idea to apply for your own credit card so that your credit will still look good to creditors before your divorce is finalized.
When it comes to loan and credit card accounts that are joint, you have a few options of how to take care of them. First, you are able to have them paid off. Second, you can have them paid off at a later date. Third, you can leave them as they currently are.
If anything, it is best to have the debt paid off and not worry about it coming up in the future. By having balances paid off, your credit score will look better. This will especially be true if you count on your spouse to make payment but fails to do anything.
Splitting the Home
When a home is jointly owned, there will be no way to have one spouse removed from the mortgage. Only through a refinance will make it possible for one spouse to have complete ownership. Being able to refinance and keep the home may be difficult if you do not have any income. You and your spouse may need to have the home sold and then split any proceeds from the sale.
When a divorce consumes you, your emotions may get the best of you. So it is best to have complete control of assets so that you don’t come across any risks involved with divorce. If anything, get in touch with an experienced divorce attorney by giving us a call today.