Protect Yourself From Debt During A Divorce
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When people get a separation or divorce they know that any assets need to be split, but more often than not there are also debts that need to be split. How those debts are split will seriously affect both partners future, so it is vital that you get good legal and financial advice from the beginning.
The first step in managing the issue is to write a list of all your outstanding bills and your assets. Also, make a comprehensive list of all of your partner's debts and assets. Put together a folder containing all documentation that you have that relates to those debts and assets. This list and those documents will help a solicitor to give you sound advice, quickly.
Take action to stop either yourself or your partner from increasing these debts. Do this amicably if you can. Discuss with your spouse the need to protect each other and the things that need to be done to achieve this.
Joint signatory bank accounts, credit cards etc. should be frozen or cancelled as soon as possible, this way more debt cannot be built up. Do not leave joint accounts or cards as they are. A friendly divorce can turn acrimonious at any time.
Freezing a joint account may not be practical, because if you suspend the account neither of you can access the funds in that account. In addition, any household bills that are currently being automatically paid out of that account will not be honoured. A more practical alternative is to ask the bank to change the account, so that withdrawals above a certain amount can only be actioned with joint signatures.
Immediately opening separate accounts is the best option. It allows any joint accounts to be closed quickly before problems arise. New direct debits can then be set up to pay the essential bills such as the mortgage, rent and services bills from the new accounts. Bear in mind that not paying these bills is counter-productive and can lead to the loss of the home or services and adversely affect both partners credit ratings.
With credit cards and store cards, the main account holder is often liable for the debts. This means that if your spouse runs up any more debts using your cards you will be held liable for that debt. If you owe nothing on the card, cancel it. If you still owe money, but can afford to pay off that debt and cancel the card, do so immediately. Failing that, get your credit limit reduced to the minimum amount possible. Tell your credit company about your situation, some firms will give you a new credit card immediately, thus enabling you to cancel the existing card without spending a long period without a credit card.
Article Source: Articlelogy.com
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