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Helpful and protective steps for finances during divorce

Most people getting divorced have two primary fears: how much time will they be able to spend with their kids (for those who have children), and how much will the divorce cost. The cost question has just as much to do with how much debt they will be liable for as it will pertain to how much they will continue to pay through spousal support.

It is not uncommon for a spiteful spouse to run up credit cards, abscond with money from joint bank accounts or vandalize property in a fit of rage. While the injured spouse may ultimately obtain a court order enabling them to recover the money, some property may not ever be recovered or be the same.

Because of this, it is prudent for divorcing parties to protect themselves. This post will provide some helpful tips. 

Get your credit report – Before initiating a divorce, it is important to know where you stand with regard to your credit rating. This is especially important if you have joint credit lines and commonly use them sparingly. As we said before, it is not surprising for a soon-to-be ex-spouse to get reckless with a credit card that can affect your credit.

Gather financial records – This includes bank statements, 401(k) statements and records detailing investments.  While this information can ultimately be produced through discovery, getting these documents before the action has been commenced can save time and money.

Close joint accounts – It is also prudent to open separate accounts, including checking and savings accounts, so that you can begin to protect your own income. 

Source: ABC News.com “How to protect your finances in a divorce,” AJ Smith, March 31, 2014

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