Five Steps for Separating Finances in Divorce
Carefully separating finances in a divorce can ensure you and your spouse can have a clean break and can go your separate ways. Taking steps to separate your finances during the divorce may help you gain more financial independence from your spouse, ensure only you are responsible for your debts, and protect your credit score.
Not everything in the divorce can simply be divided between you two. Credit card debt, for example, cannot be changed into one spouse’s name without the debt being paid. You may have to be accountable to each other after the divorce until the debt is paid off. The credit card company can come after you if the payments are not made even if paying the debt is your spouse’s responsibility. There are a few ways you can deal with this situation. Many couples use assets to pay off any jointly held credit cards before they divorce. If this isn’t feasible, you can also try to transfer the standing credit card debt onto a card in one of your names. Using assets to pay off debt can work for jointly held loans and lines of credit as well. The benefits of this are two-fold: you can both make a clean financial split, begin your new single life with less debt, and you won’t have as much in assets to divide when all is said and done. This can save you a significant amount of time and effort.
Consider a lump sum payment of alimony in the form of cash and/or other assets if you want a clean separation of your finances. This ensures neither spouse is dependent upon the other for their ongoing financial security. Being in control of your own finances, especially if you weren’t before, can be empowering and can help you cope better with your new single life. It can be hard to feel independent when someone else is paying your mortgage or giving you your monthly income.
There may be some tax breaks in this as well.
Consider working with an experienced Massachusetts divorce mediator if you and your spouse want to cleanly divide your finances in your divorce.
A mediator can work with you on organizing your finances in a way that will help both of you feel more independent and financial stable after the divorce. A skilled mediator can also guide you and your spouse through the process of dividing your assets and debts and reaching an agreement on alimony while you create your separation agreement. These are some of the most difficult issues to work out in a divorce, but divorce mediation can help you do so amicably.
Do you have questions about separating finances? If so, Mediation Advantage Services can help.
Polly A. Tatum has the skills and experience needed to help you and your spouse amicably separate your finances through guided and non-adversarial mediation. Based in historic Worcester with a satellite office in Northboro, MA, our firm serves all cities and towns throughout Massachusetts and Worcester County including, Auburn, Paxton, Leicester, Sutton, Grafton, Shrewsbury, Westboro, Northboro, Southboro, Holden, Sterling, Princeton, Worcester, Charlton, Millbury, Dudley, Spencer, Brookfield, Sudbury, Natick, Framingham, Hopkinton, Milford, Blackstone, Leominster, Fitchburg, Acton, Jefferson, Barre, Oakham, Cambridge, Newton, Marlboro, Lancaster, Bolton, and Hudson. Call our office at (508) 795-1557, fill out our online form, or email us at [email protected] today to schedule your Complimentary Mediation Success Planning Session. You can also sign up for our eNewsletter or download our free e-book for more information regarding divorce in Massachusetts.