Divorce FAQ: Dealing with Finances

November 12, 2016  |   Posted by :   |   Blog

divorce planning

When you’re going through a divorce, worrying about money can add extra stress during an already challenging period of upheaval. As well as legal fees and the uncertainty around the duration of the process, you may also have to adjust your finances to accommodate extra outgoings and changes to your circumstances.

The first thing you should do when you’ve made the decision to separate is speak to your solicitor and discuss your options – resolving financial disputes out of court via arbitration or mediation is generally much cheaper than bringing your case to court, and may help you to come to a more mutually beneficial agreement with your ex. And if you need to go to court, agreeing on fixed-fees for each step of the process can help you to keep costs down.

Next, you will need to sit down and go through both your individual and joint finances to determine the worth of all the assets and debts that will be included in the separation. Having this information laid out clearly as early as possible will help you to work with your solicitor to come to an easier resolution with your ex and reduce the time spent in negotiation. Knowing the state of your financial situation will also give you a chance to create a budget for your new circumstances and plan for any future changes.


Your financial assets may be shared or individual, including bank accounts, savings, credit cards, investments, property, businesses, and expensive possessions such as cars or jewellery. If you own property, get it valued, gather as much information on your personal and joint finances as possible, and provide your solicitor with the relevant paperwork. Try to have a preliminary conversation with your ex about dividing up your assets so that you can go to your solicitor with a plan in mind and avoid disagreements down the line. However, make sure not to make any financial decisions without first seeking legal advice.


Debts and liabilities must also be considered during divorce to determine whether they are shared or individual responsibilities. These may include overdrafts, credit cards, loans or any outstanding balance on mortgages. If you let your creditors know that you’re going through a divorce, you may be able to freeze the interest on any debts until the separation is resolved, or transfer the balance to a zero-percent credit card to ease the transition. It’s important to note that if a shared debt was taken out in your name, or if you are the primary card holder on a credit card, you will be held solely responsible for repayments, even if your ex played a part in accruing the debt. If you cannot come to an agreement on dividing contributions after your separation, you will have to prove that spending was mutual.

Settling your finances:

When negotiating a financial settlement, do your best to communicate as clearly and fairly as possible with your ex – try to set your emotions aside while dealing with the money side of divorce and treat it like a business arrangement. Use the experience and advice of your solicitor and keep in mind that the longer you quibble over a decision, the more expensive and lengthy the process will be.

Know your financial rights and seek advice from your solicitor as soon as you can – don’t let yourself be bullied by your ex into making financial decisions without first having all the legal information at hand.

If you own property together, you will need to decide whether to sell it and divide the proceeds, or if one of you is able to buy out the other, or if one of you plans to move out but keep stakes in the investment until a later date.

If you have children, in most cases, the main caregiver will be given priority when deciding who stays in the family home, while the other parent may still be required to contribute to the mortgage, rent, and household costs. There also may be additional costs of childcare, or setting up in a new home, and any other maintenance payments.

Budgeting for the future:

After divorce, you will need to manage your finances as an individual. There is likely to be a significant change to your circumstances and working out the ‘new normal’ can take some adjustment. There may be higher household costs to contend with now that you’re no longer splitting bills, or you may find you are suddenly responsible for previously shared debts, but you may also be eligible for benefits or child maintenance.

First things first, you’ll need to put together an accurate budget of your new incomings and outgoings, and work out the best way to manage your finances. There are always ways to save on bills and expenses, and the earlier you can start budgeting for the future, the better you will be able to cope with your change in circumstances.

Next, it’s essential to update your will to reflect your separation – until you receive a decree nisi, you are still technically married, and will be treated as such by the law should the worst happen.

Finally, you can legally separate your finances through a process of ‘financial disassociation’, which requires that you demonstrate you have stopped living with your ex and all joint accounts have been closed. Once you have disassociated your finances, your credit rating will no longer be affected by your ex’s and you can start afresh.

For financial and legal advice on the process of divorce and separation, get in touch with the expert family law solicitors at Frances Lindsay & Co. We can help you resolve disputes out of court via mediation, arbitration or collaborative family law, or assist you in pursuing a court divorce. Let us take the weight off your shoulders and help you get your finances in order.

Tags: , , ,

We support the award-winning NGO, AfriKids by raising funds and awareness of their child rights and community development work in northern Ghana. Click here to learn more.