Although it is difficult, divorce needs to be about preparing for the future, not reliving the past. If you and your spouse are on good terms, consider an uncontested divorce or a collaborative divorce. This can be a much less expensive option than ongoing battles through attorneys. Working together to calculate marital assets and joint debts can be fairer and more efficient. Together you can also avoid acquiring additional joint debt, close any joint accounts and copy important financial papers.
In addition, you should each open individual bank and credit card accounts before your divorce is finalized, because itâ€™s often easier to get a credit card and an individual bank account in your own name while you are still married.
Protecting Your Credit
You and your spouse should pull your credit reports and together dispute anything that can be resolved. Contact the three major credit reporting agencies â€“ Experian, Equifax and TransUnion â€“ and obtain a copy of your credit report from each of these agencies. Remove each other from your respective credit cards. Remember that if these cards remain in joint names, each of you continues to share responsibility for any outstanding debt.
Do not cancel the cards if you can simply remove one of you from the card because closing accounts will have a negative impact on your score.
Playing Fair to Collect your Share
One of the first steps in divorce is taking a home inventory and deciding how assets will be divided. Together with your spouse, write down all information about assets and debts. If there are assets you brought into the marriage yourself, whether it is a vehicle, an inheritance, or personal item of value, should continue to be yours- it is probably only fair.
One large asset that can be tumultuous if you and your spouse are not playing nice is your home. Decide who can actually afford to continue paying for the home with a single income. If you cannot sell the home in todayâ€™s market, perhaps remaining as joint tenants or tenants in common could work until the market improves. This does not mean you cannot get a divorce without dividing the home. Of course you can, maintaining joint ownership may be the way you provide for marital distribution of assets.
Joining Forces on Joint Tax Returns
Both you and your spouse are liable for taxes on joint returns. Working through taxes is much easier if you can work together. This can help minimize the amount of taxes you and your spouse owe. Seek advise of a neutral accountant for the biggest tax benefit both of you can achieve, and do what the accountant suggests.
Yesâ€¦It is better for the kids
You will need to protect your children both emotionally and financially; make sure to check the beneficiaries of your will, pension plan, trusts, IRAs and life insurance to protect your children. Protecting children goes beyond child support payments: it begins with parents playing nice. Children suffer if the parents do not get along, so try to put the divorce process behind you as quickly as you can in order to move forward with your life. Kids feel if there is a lingering bickering going on in the background. So, when you do certain things, ask yourself- how is it affecting my kids? Is it going to be better for them?