If you and your partner have made the decision to go your separate ways, it’s only natural to be concerned about the future of your finances. After all, when you have invested a great deal of time and money into setting up your home and building a life together, the prospect of suddenly having to make significant changes to your day-to-day finances can be daunting.
It’s likely that one of your greatest concerns at this time will be protecting your assets and ensuring you can maintain your lifestyle – be it by yourself or with children. Luckily, our divorce law experts have teamed up to provide you with useful advice regarding how to protect yourself and your finances during divorce or dissolution.
As we mentioned in our previous blog, communication is not only the key to speeding up the divorce process, but it can also save both you and your partner a great deal of unnecessary legal costs that can build up during bitterly fought court battles. Before sitting down with your spouse to negotiate a financial settlement, it will benefit you to make a list of all the financial aspects involved in your specific situation. Are you part of a joint mortgage? Is there any other shared debt that has been building up? Perhaps you are both joint owners of a car, or have jointly invested in shares. As well as this, it’s vital to consider which bills are you and your partner responsible for paying.
While all these concerns may feel overwhelming, the best thing you can do in this situation is to contact all the relevant companies or individuals
Contact your bank, credit card and loan providers.
If you have made a final decision and both you and your spouse are certain over your separation, you will need to contact your bank as soon as possible to make them aware of your situation, especially if your separation isn’t amicable.
This way, you can discuss what happens next to any loans, joint accounts and credit cards to gain some clarity over what happens next.
It is important to note that with any joint loan, you are both liable for the entire debt, regardless of your separation.
Contact your mortgage advisor.
One of the most significant financial commitments you can make is property, and therefore, this will likely be the most difficult decision to make during a divorce.
You may have questions on what steps to take when it comes to mortgage payments if you are no longer living in the property, or who will take full ownership of the property, and who will move on. Contacting your mortgage advisor as soon as possible will help you to understand your rights and responsibilities more clearly. It is important to note that missing any payments can affect your credit rating. Therefore, it’s crucial to be open and honest about whether or not you will be able to afford repayments as soon as you decide to separate. You have several options here:
- Agree to sell the home and divide the profits fairly, allowing both you and your spouse to potentially purchase new homes separately.
- Arrange for one party to buy the other out, leaving one of you as the sole owner of the property but allowing the other to afford the costs of moving out and purchasing a new home.
- Keep jointly owning the home – this may be worth considering in cases where the split is amicable and children are involved.
- Transfer part of the value of the property from one partner to the other as part of the financial settlement. The partner who gave up a share of their ownership rights would keep a stake or ‘interest’ in the home.
Renting? Contact your landlord as early as possible.
If you are renting, we advise you contact your landlord as soon as possible. If the tenancy is in your name, you legally have the right to remain in your home, regardless of the reasons for your separation. That means that you are solely responsible for paying rent as and when the tenancy agreement has lain out. If you and your partners are joint tenants, both of you have the right to remain in the property. However, it’s likely that you’ll want to end your tenancy early, which is why it’s vital to speak to your landlord at the earliest stage. The exact rules regarding ending your tenancy will be stated in the original contract you signed, however, you may be able to negotiate an early exit with your landlord or agree for one party to remain in the property until the tenancy runs out.
Protecting any other financial assets
If you are worried about your former partner potentially taking some of your assets overseas, transferring them, or selling them on, you may be able to apply to the Court to stop this from happening. This has always been regarded as a complex area of law and it is always advised to speak to a specialist solicitor regarding this area.
Find the right solicitor
Seeking the correct solicitor for your individual needs is vitally important. The advice and support that they will provide you with moving forward is likely to shape your future, and the beginning of a new chapter in your life. It is imperative to choose the right solicitor for you.
Some factors to consider are:
- Do they specialise in this particular area of law?
- Are they a member of the Law Society?
- Are they open, and honest about fees and the costs involved?
- Do they have the experience necessary to help me in my individual situation?
It’s important to note that you will be sharing confidential and personal information with your solicitor, so it is likely that you will want someone who is friendly, approachable and above all somebody you can trust.
At Crisp & Co, our solicitors are experts in divorce and the financial outcome of separation. With vast experience in helping a wide range of clients to negotiate financial settlements that protect their assets and interests, you can rely on our dedicated team to provide pragmatic advice that’s tailored to meet your needs. Contact us today on 0203 857 9885 or fill out an enquiry form from the ‘contact us’ section of the website.
For more tips on managing your finances during divorce, look out for our upcoming blog posts regarding how to protect yourself in the separation process.