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Divorce is expensive. For starters, you have the costs of hiring attorneys and splitting up assets, which can be substantial.
There’s also the hard fact that living as a single person costs more. Couples enjoy substantial savings from sharing expenses such as child care, of course, but also the day-to-day cost of living.
This is not to say you shouldn’t divorce, only to do it with careful thought to the consequences. Make sure that, since your standard of living probably will drop, you do all you can at the outset to minimize the financial damage.
Here are 10 steps to take as soon as possible if you see a divorce in your future:
1. Talk to a lawyer
Consult with an attorney immediately, even if you don’t intend to be represented by a lawyer in the divorce. If you and your spouse are cordial, that’s great. But you need to know your rights and options.
If you don’t have money for an attorney, there are options:
- Legal Services Corp. Links low-income people with local Legal Aid offices offering free or low-cost legal assistance for civil (noncriminal) matters.
- StatesideLegal. This nonprofit organization, affiliated with Legal Services Corp., offers legal guidance and advice for service members, veterans and their families. Use this map to find local free and fee-based legal services.
- LawHelp.org. Connects low-income people with local legal aid and public interest law offices, information about legal rights, court forms and information, self-help guidance, links to social service agencies, and more. Use this map to locate resources in your area.
- Law schools. Some law schools conduct free legal clinics for the public, staffed by law students and supervised by professors. Find one near you in the Association of American Law Schools directory of member law schools.
- Bar associations. Professional organizations for lawyers can help you find legal help, including free services.
Seeking out a lawyer may make you feel like you’re assuming the worst about the process. But even in an amicable divorce, you need to take every possible step to protect yourself.
Divorce is an emotionally volatile process for both parties involved, and a spouse possesses valuable personal information, like your Social Security number, birthdate and other identifying details. Bitterness can make people do the strangest things.
2. Pull your credit report
You are allowed three free credit reports each year. These show all credit accounts that exist in your name alone and jointly with someone else. Watch for:
- New accounts opened in your name.
- Changes in your credit accounts. Unexpected changes are a tip-off to possible identity theft.
Your credit score can be damaged if a spouse or ex-spouse fails to pay joint bills. Read “Marriage and Credit: 6 Common Myths” for more information.
3. Close and monitor joint accounts
Sometimes a divorcing spouse will move money from joint accounts to an individual account, making it difficult or impossible for the other spouse to recover the cash.
The spouse who is behaving badly in this manner then can run up debt on joint credit cards, for which the innocent spouse is also responsible.
The Consumer Financial Protection Bureau says:
When you have a joint account, each account holder is responsible for the full amount of the balance. The card issuer can seek to collect the amount due from either account holder.
Ask your spouse to help close or freeze your shared financial accounts, including credit cards, joint bank accounts and lines of credit. If that’s not possible, see if you can do it on your own. You’ll find the account rules in the contract you signed when opening the account. You can look for a copy on your bank’s website or ask the bank to help.
Also, be sure to remove your spouse’s name as an authorized user from your personal accounts.
Some divorcing spouses leave one joint account open to fund shared expenses, especially costs related to children.
However, limit yourself to just one joint account if possible. Watch its activity regularly by requesting the balance and most recent transactions from an ATM or bank branch or by viewing the account online.