When I mention to people that they should prepare for their divorce, I often get a strange look. Who does that?
But we prepare for everything. How many of us wake up one day and go get a job? Go get a house? Go and have a child? We prepare before we make important decisions, and getting a divorce is no different. Now that you’ve decided to prepare, what steps should be taken next?
The most important decision you will make is hiring the right attorney. In my opinion, the attorney you pick should do exclusively family law. This is a specialized field and you do not want someone who is dabbling in real estate, personal injury and family law. Meet that attorney and see if you can work with them. Are they going to communicate with you? How will they communicate with you? Although you may want to handle your case amicably, keep in mind, that if the need should arise, you want someone who can put up a good fight for you. You don’t want to find yourself in the middle of a fight, and discover you have an attorney you cannot effectively handle that fight. You don’t want someone who only wants to fight either, but someone who can do what you need.
Once you’ve found the attorney you want to work with, get your financial picture in order. You need a clear picture of where you and your spouse stand financially. One of the primary goals of the divorce process is to the make an equitable distribution of marital assets debts. In order to get your fair share it is imperative that you know what is owned and what is owed. This is a two-step process:
Determine what you own:
Some marital assets are obvious. It is clear that the marital home, any financial accounts and vehicles are assets that should be split equitably. Other not so obvious assets may include artwork, pension plans, inheritances or belongings brought into the marriage.
You should make a list of all possible assets. Gather all documentation regarding each asset including the present value, when and where the asset was purchased and whether it was purchased with joint or separate funds. You will especially want a copy of any recent real estate appraisals. Turn all documentation over to your attorney. Be sure to keep a copy for yourself.
Determine what you owe:
When determining what you owe it does not matter whose name any debts are in. Marital debt will be split based on who is more financially able to pay the debt, not by whose name the debt is in. The easiest way to determine marital debt is to get a copy of your credit report. Any debt you have will be listed on your report. You will also be able to find out if there is any.
Once you determine what debt exists you need to obtain statements on all open accounts with the balance due showing. When you turn this information over to your attorney, don’t forget to keep copies for your files.
You need documentation showing your income and the income of your spouse. If you and your spouse are salaried employees, you will need a copy of the most recent pay stubs plus your most resent income tax return.
Determining income becomes more difficult if your spouse is self-employed. In such a case, copies of bank account statements and financial business statements will give a clear picture of income. It is always a good idea to make copies of such statements before separating and filing for divorce.
You may be able to get an idea of how much your spouse actually makes but, it can be almost impossible to determine true income when a spouse is self-employed. Gather what information you can and then your attorney can help get the rest through the discovery process. You’ll need to prepare a budget, so you know exactly how much money you will need. This is important because the income you used to live on, is now going to be divided .
You will have to estimate some expenses but it is important so that you can have some idea of what you will need to survive in your new life. It is also important because it will influence how you negotiatate your divorce settlement. You need to know what you will need financially in order to evaluate your settlement options or what you may ask for should your case go to court.
Establish Your Own Credit
If you don’t have any credit in your name alone you should establish some now. You can do this by obtaining a credit card but remember you want a card that is in your name only. Many women find that, after divorce they have a hard time purchasing a home or car because they have spent years sharing credit with their spouse. All that credit you’ve had over the years with your spouse is helpful to him but once you are a single woman, you will get very little ‘credit’ for keep those payments up.
Once you have a credit card in your name use is sparingly and make sure you are able to pay it off each month. The goal is to establish a good credit score not to run up a bunch of debt. This is done by using credit cards only to the degree that you are able to pay off monthly.
You will want to protect yourself and keep your spouse from being able to clean out any joint accounts you have together. If you fear your spouse doing such a thing you can protect yourself by opening accounts in your name alone, remove ½ the funds from the joint accounts, and deposit them into your new accounts.
Do not hide the fact that you have done this and do not spend the money foolishly. Document every penny you spend so that you can have an accounting for it during settlement negotiations or in court. If you have savings accounts, money market accounts or any type investment accounts and you fear your spouse will tamper with those you should consider having the accounts frozen. You should, of course, discuss with your attorney any action you plan to take regarding joint financial accounts.
Before you separate when possible, close all joint credit accounts. Closing them before divorce proceedings will keep an angry spouse from using the account and running up charges that you may later be held responsible for.
Offer to close the accounts by paying a smaller amount than is owed. If this is done, get a letter from the creditor that the account has been paid in full and a written promise that they will not file anything derogatory about the account to the credit reporting agencies.
If you are not able to pay off or come to a settlement agreement regarding the balance owed you should have the accounts frozen. This will keep you from being able to use the account but will also protect you in the end. Once the divorce is final, the balance owed on the account can be transferred to the party the court holds responsible for the debt. If the responsible party does not pay the debt then you don’t have to worry about it affecting your credit score.
Contact and alert creditors to the fact that you are going through a divorce. If there is a change of address, make sure they know it so that you will continue to receive bills from all joint accounts.
Make sure all credit card bills are being paid. Divorce proceedings can take months and all it takes is one late payment to hurt your credit. Even if you have to pay the minimum on accounts that you know will ultimately be your spouse’s responsibility it will be worth it.
Lastly, do not give your spouse information to use against you in court. Facebook accounts should only list information that you would share with your boss or a member of your church. If you really need to go out and party, don’t take pictures of it! This event will be stressful enough for you, don’t give your spouse ammunition against you.