How to Prepare Financially for Divorce

One of the greatest concerns that people have about divorce is the impact that it can have on their finances. "Will divorce leave me with nothing?" "Will divorce affect my credit score?" These are common questions that our Long Island divorce attorneys hear.

Our team has compiled a sort of "to-do list" to help you prepare financially for a divorce. Give us a call at (516) 688-0088 if you need an experienced family law attorney to help you protect your assets during a divorce in Long Island.

Know Your Spouse’s Income

In order to ensure that your marital assets are properly divided, it is important to know your spouse's total income. This includes:

  • Salary/hourly wages
  • Overtime
  • Bonuses
  • Investments
  • Health benefits
  • Social Security benefits
  • Retirement accounts (401k/IRA)

Open Your Own Personal Accounts*

If you have shared accounts with your spouse, then you will need to open new, personal accounts. Conversely, you can take your spouse's name off of a shared account and they can open a separate account in their name. This should be done for accounts including:

  • Checking
  • Savings
  • Credit cards
  • Auto loans
  • Mortgages

Pay Off Personal Debt

If possible, pay off or pay down any debts that are solely in your name. Doing so can help simplify the debt division process during your divorce.

Build/Establish Credit in Your Name

One of the biggest concerns most people have when thinking of getting a divorce is how it will affect their credit score. If you and your spouse have separate accounts and you have already established good credit in your name, then splitting from your spouse should not damage your score too much. However, if you have joint accounts, then your existing credit from those accounts will remain on your credit report. It may be in your best interest to open a personal account and begin building credit on your own.

Options include opening a personal credit account, if possible, and using it wisely. If you have little to no credit, there are many banks and credit unions that offer low-limit "credit building" cards for this very purpose. Another option might be taking out a loan, such as an auto loan or a mortgage. Making these payments on time can help build credit in your name.

Increase Your Earning Potential

Are you concerned about a drop in income after your divorce? You might benefit from seeking a better-paying job than the one you have now or, if you do not have a job, finding one as soon as possible.

Have you been a home-maker or a stay-at-home parent during your marriage? In some cases, you may be able to take college classes or other courses with the aid of spousal support, as long as the courses are with the intention of increasing your earning potential and seeking meaningful employment to support yourself after the divorce. A Long Island divorce attorney can help you determine if this option is available to you.

*AN IMPORTANT NOTE: Be careful not to take any action that could be viewed as hiding marital assets or preventing your spouse from accessing important financial information. This kind of behavior is prohibited and will only hurt your case. Hire a seasoned divorce lawyer to ensure that your property and assets are protected in an ethical and court-approved manner.

Categories: Divorce