Divorces can be incredibly stressful, and there’s a strong link between debt and mental health problems. Remember, it’s not just your financial well-being at stake here. Take a look at our other guide, Mental Health and Finance, for practical ways to look after yourself when debts are looming.
As far as protecting your money goes after a divorce, there are a few simple step you can take to make things a lot safer for you both. One of the most important is to protect all your legal rights involving your home. Unless your divorce was an extremely amicable one, you’re unlikely to both end up living under the same roof. Depending on your situation, you might want to look into changing the ownership of the property, or ‘registering your interest’ in it if your name’s not on the mortgage – which would at least mean it couldn’t be sold on or re-mortgaged without you knowing.
Of course, there’s nothing preventing you from continuing to own the property together, even if only one of you is using it. The trouble is, if you were to die, your ex-spouse would almost certainly end up inheriting the place outright – which is something you may or may not be happy with. Explaining your situation to your mortgage provider is a smart move however things end up. Again, remember that paying off joint loans like this remains the collective responsibility both ex-partners in a lender’s eyes. You don’t suddenly only owe half as much just because you got divorced. If you’re renting, you’ll obviously want to talk your landlord through your change in circumstances. Again, depending on how you’re fixed, you might decide to get one of you taken off the agreement.
Next, you should think about any other joint finances you share with your ex. Talk to your banks, lenders and providers to set up arrangements to protect you both. For instance, you could change the terms of any joint accounts so that neither of you can take cash out without the other’s permission. If you’re getting your income paid into an account your ex has access to, you’ll probably want to change that, too.
Finally, you should get your credit report altered so it’s no longer tied to your ex-spouse’s. Being married doesn’t necessarily create a ‘financial link’ between you, but if you’ve bought or rented property together or set up any joint finances then your ratings can affect each other. To cut those ties, you’ll need to talk to the credit reference agencies and provide proof that your finances are no longer linked. You can read more about credit scores here.
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