Many Pennsylvania couples who have recently been through a divorce would simply like to put the past behind them. However, without proper planning, that could be a recipe for a financial disaster.
Before, during and even after a divorce, it is essential to review your financial situation and address the important changes that can have significant financial consequences should they go unaddressed.
The following are some relatively simple, commonsense tips provided by the writers of MoneyTalkNews, which can help you protect yourself financially after a divorce:
1. Close any join accounts. Whenever possible, close down any joint checking, savings credit card, vehicle loans and other financial accounts you have maintained with your divorcing partner. This is just a basic precaution, because if both of your names remain on these accounts, both of you have the legal right to access them and either add to or subtract from the balance. Leaving a joint account open could allow your divorcing partner to run up a joint credit card account or draining your bank account.
In the case of a jointly held mortgage, you may need to take additional legal steps to sever the couple’s shared responsibility for the loan. Even if one partner is given the family home during the property division process, the divorce decree may not be enough to relieve the other spouse of responsibility for the mortgage. You don’t want to end up having to pay off that loan should your divorcing partner go into foreclosure sometime in the future.
2. Protect your credit. In some cases, lenders refuse to close down a joint account or to assign financial responsibility for it to one of the spouses. A divorce decree’s assignment of the debt to one party in a divorce settlement will not serve to remove the other party’s liability in the lender’s eyes. If this occurs, you should work as hard as possible to pay off that debt so the account can be closed. In the meantime, it will be necessary to keep a close eye on the account in order to to check that payments are being made in a timely manner, and no that further debt is being incurred.
There are a number of financial issues that arise after divorce, such as insurance, tax changes and others. These two items are certainly not meant to be an exhaustive list. They are simply a starting place for Pennsylvania residents to consider in order to avoid serious financial issues later.
Source: MoneyTalkNews, “4 Steps to Take as Soon as You Say ‘I Don’t’,” Angela Colley, Jan. 4, 2011