The divorce process can have a detrimental effect on one’s finances. However, there are steps that Michigan residents can take to protect their money.
It is important that divorcing individuals are aware of their own credit standing as well as that of their spouse. Obtaining the credit reports of both parties can reveal hidden credit accounts and credit issues that should be addressed.
Divorcing individuals should also open banking accounts in their name only to have sole control of their money. It is important to advise their spouse that they are opening their own checking and savings accounts and how much is being deposited to avoid accusations of hiding marital money.
For people who share credit accounts with their spouse, they should pay off the balance and then close the accounts. If they cannot pay off the accounts, they should consult with their creditors to determine how to have their names taken off the accounts. During a divorce, any shared debts will be divided between the two parties.
For joint investment accounts, individuals may withdraw 50 percent of the funds. They should not withdraw all of the funds as the court may compel them to return half of the money. Modifying the signature authority on the joint account so that both parties are required to sign to complete transactions is another way to protect the funds.
Another smart financial move with an impending divorce is to avoid incurring new debt. It is best to use cash until the divorce becomes final. Every effort should be made to avoid starting a post-divorce life saddled with substantial credit card debt.
A divorce attorney may engage in litigation to obtain favorable settlement terms regarding divorce legal issues, such as property division. The attorney may also advise clients of which steps to take to protect their assets.