You’re in the fight of your life. Divorce has turned into a full-time job, your ex is playing dirty, and suddenly you’re supposed to become a financial expert overnight.
Who gets the house?
What happens to the retirement accounts?
And why does his mistress’s shopping spree look like your credit card bill?
Let’s break it down. I’ll show you exactly how to start sorting through your money, protect yourself from your ex’s mess, and make sure you walk away with what’s rightfully yours.
Step One: Track Down the Money
Start with what you do know. Make a list of every financial account you can think of. That includes joint and individual accounts. Think:
- Bank accounts
- Credit cards
- Retirement plans (401(k), IRA, pensions)
- Investment accounts
Even if you’re not sure about the details, write down anything you remember. That old credit union account? Write it down. The retirement account from his job ten years ago? Add it to the list.
Now pull your credit report. This shows all the debts tied to your name. You are not allowed to check his report without his permission, but yours will help you figure out what you may be responsible for.
Step Two: Know What’s Yours (and What’s Not)
There are two kinds of property in divorce: community and separate.
Community property usually includes anything earned or bought during the marriage. That means income, houses, retirement savings, and debts. You both have rights to those.
Separate property is generally what you owned before the marriage or what you inherited or received as a gift. (Your lawyer can help you understand the specific rules in your state, because it varies.) A prenuptial agreement may also define separate property.
Not sure what’s what? Talk to a divorce attorney. You need to know what you can legally claim before you start negotiating.
Step Three: Open a Bank Account (and Get a Credit Card Too)
If you don’t already have a bank account in your own name, open one right now. Seriously. Your joint account is vulnerable. Your husband could drain it tomorrow. A separate account gives you security and control.
And while you’re at it, apply for a credit card in your name only. Even if you don’t have income, you can qualify using “household income” while you are still legally married. That credit card might save you if cash runs low during the divorce.
Step Four: Figure Out What to Do With the House
Keeping the house feels comforting, but here’s the hard truth: You might not be able to afford it. Think very carefully about this, and if keeping up the house it going to make your budget tight, then it’s not a good idea.
If you decided to keep the house, you’re going to have to get your husband’s name off the mortgage. This will mean assuming the mortgage, buying him out, and/or refinancing. You’ll need to qualify for any of this financing on your own and that can be tough.
Selling the home and splitting the money may be your best bet. Yes, it is emotional. But if the math does not work, staying in the house can do more harm than good.
Step Five: Don’t Get Stuck With His Debts
This is where things get tricky and dangerous for your credit.
Let’s say the judge tells your ex to pay off a credit card that has your name on it. If he misses a payment, your credit takes the hit. It does not matter what the court order says. The credit card company only cares whose name is on the account.
Here’s what you can do:
- Get debts paid off before the divorce is final
- Ask your ex to refinance the debt into his name
- Request a balance transfer to a card in only his name
- Close joint accounts once they are paid
If your name is on it, you are responsible. The only real solution is to remove your name or pay off the balance.
Step Six: Don’t Forget the Retirement Money
Retirement accounts are easy to overlook, but they are often the most valuable part of your settlement.
If your spouse added money to a 401(k), IRA, or pension during the marriage, you likely have a legal right to part of it. It doesn’t matter whose name is on the account.
Don’t give up your share just to avoid a fight. This money can make or break your future. Work with your attorney to make sure you understand what you are entitled to.
When to Ask for Help
If your head is spinning right now, you are not alone. Sorting through money during divorce can feel impossible, especially when your ex is playing games.
That is why I created the Divorce Strategy Guide. It’s an inexpensive course that will quickly show you the most important things you need to know about protecting your money, getting help from the right professionals, obtaining the right financial documents, and what to do to get the best settlement.
You don’t have to figure it all out by yourself. I’ve got your back.
