4 Avoidable Divorce Mistakes That can Hurt You Financially
A divorce is usually a tumultuous time, even for couples separating under the best of circumstances. Oftentimes, it causes spouses to act out of anger, spite, and resentment. Unfortunately, these same emotions can cause them to make mistakes that jeopardize what could have been a favorable outcome to their divorce. Worse, some of these mistakes can leave lasting damage to ytheirour finances long after the separation has been finalized. We take a look at a few of these mistakes.Not Having Your Personal Documents
Divorce or no divorce, it’s always a good idea to have your personal documents close by, ready to be pulled out at a moment’s notice. Documents with information such as your financial accounts, Social Security statements showing your spouse’s earnings records, and receipts for major assets and home improvements can go a long way towards having smoother divorce proceedings. Not only that, having this paperwork ready will help with things like planning your retirement and taxes.Failing to Consider Refinancing the Marital Home
Any discussion on property division in a divorce will naturally lead to the house and mortgage. While it may seem like a good idea to negotiate to keep the marital home, this isn’t always the case. Sometimes, refinancing the home and mortgage is the cleaner solution.
Even if you were to agree that your ex buy you out of the marital home, this does not mean you are off the hook for mortgage payments. In the eyes of lenders, if you and your former spouse’s names are on a joint mortgage, divorce or not, both of you are responsible for making payments on time. So, if your ex were to miss a mortgage, or worse, default on the loan, you can expect your credit score to take a hit.
The better solution is to sell the house and use the proceeds to pay off the mortgage, or refinance to remove your name from the loan.Not Closing Joint Accounts
And just like your mortgage, you are also liable for all other debt and accounts opened jointly in you and your ex-spouse’s names. Remember, creditors will not void your contract because of a divorce—your agreement with them happened before the split.
The best solution is to close all joint accounts and remove all authorized users from your credit cards and other lines of credit. Any outstanding debt can then be moved to new accounts or loans under your name only.Refusing to Negotiate a Settlement
While the divorce proceedings can always end up in court, it will always be more affordable to work towards a settlement. Solutions like a collaborative divorce or mediation are geared towards finding non-hostile ways to dissolve the marriage and ensure that each spouse walks away with dignity. Of course, this is easier said than done, especially when child custody, infidelity, and abuse are involved. But if your priority is to protect your finances and prevent a drawn-out legal battle, settling out of court is the way to go.
If you need a Texas Family Law attorney for your divorce, contact the Lyttle Law Firm for a consultation today. Call us at 512.215.5225 to get started.