Separation is never easy. It has a significant impact on your mental, physical, emotional and financial health. Unfortunately, one of the considerable consequences of divorce is the economic difficulties for both involved in that divorce.
Managing your finances well during and after the divorce process can help you take control of your finances and avoid getting stuck in a financial quagmire.
You can protect your savings, credit rating, investments by being aware of your finances. Of course, there are different reasons to divorce everywhere, but some common grounds for divorce are unreasonable behavior and financial stress in the UK.
Many studies have shown that most families and couples suffer financial stress post their divorce process.
But by being a little careful and taking small measures, you can be in a safe zone and protect yourself from any financial shock.
This blog takes you through steps that will guide you to minimize your financial damage post the divorce process.
Proper planning of your property
If you are planning to get divorced, you have to make sure you both are clear on the division of your property. It is essential to agree on one point relating to your property.
Also, there should be an understanding regarding the monthly payments to avoid any confusion at the end. Then, if the kids are also involved, you can conclude that it is best for everybody, including the kids.
To safeguard your wealth, it is advised to relinquish an amicable agreement wherein both parties are at a good end. If the divorce is dragged for a longer time, it keeps getting an expensive deal.
If you settle your case at home, that would cost you less rather than taking your case to court and waiting for a settlement in the court premises.
Though exceptions are everywhere but barring the exceptions, the above advice applies to everybody involved in a divorce process.
Suitable assessment of debts and liabilities
When you planned to get married, you may have designed your future in a certain way. The financial aspect is one of the essential aspects that need to be scheduled when getting married.
Many couples, while getting married, decide to borrow loans from the market to finance their assets, such as a new house or a new car.
To facilitate such needs, banks and direct lenders provide online loans in Ireland facility. These loans are easy to borrow with minimum formality and procedures.
But during a divorce, these loans should be taken care of on a priority basis to avoid getting into any trouble. As specified above, there may be amazing credence in both of your names.
Firstly, you should focus on sorting out the credit that involves both your names together. Next, note down all such debt and liabilities. Finally, once you have noted all the disadvantages, allocate all of them to who will be responsible for paying off those liabilities.
If you are confused, you can always seek expert advice and request a credit report to clarify things. But before proceeding, make sure to count all your liabilities.
Once you have counted all the liabilities, make sure to calculate your assets too. Your assets may include property investments, stocks, bonds or any of your savings accounts.
Ensure the payments from your ex’s side
While proceeding towards the divorce agreement, ensure that provisions of payments are explicit. Any confusion may increase your financial burden. Hence, to ease off your financial responsibility, make sure that the agreement is cautiously made.
If your spouse does not meet his/her payment terms, it may lead to implications for you towards the end of divorce proceedings.
For your savings or investments account, if you are not left with any balance, it is advised to go for the closure of those accounts such as credit card accounts, any departmental accounts etc. If the closure is not possible, get your name removed from the joint name process as you will not be using it anymore.
If you both cannot make payments in your joint accounts, it may negatively affect your credit ratings. It means that you and your companion have to accept the equivalent payment terms and circumstances.
If your payments are stuck due to your ex, you may have difficulties in planning your future income in your single life. You may not be able to plan your disposable income post-divorce process.
As a couple, it becomes easier to cater to your expenses because of the two incomes involved. However, once you are separated, it may be challenging to match up to your previous lifestyle. The best solution is to create a budget with your new income level and plan to pay off your debts accordingly.
While budgeting, you can prioritize your debts as per your income. You may plan to pay off your smaller debts first and then go to higher deficits or vice versa. Whatever way you choose, it is vital to prepare a budget before proceeding to your debt payments.