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Protecting personal finances during a divorce

On Behalf of | Feb 2, 2017 | Divorce |

There is no “how-to” manual for going through a divorce. No two are the same. However, every individual going through a divorce in Texas should make every effort to protect his or her personal finances. While the financial details of the dissolution can sometimes be the most difficult to resolve, there are things that a person going through a divorce should consider doing to protect their personal finances.

Texas is a community property state, making asset division dependent upon good record keeping. Document the last three to four years worth of financial statements from both personal and joint accounts. Should one party make a large purchase from a joint account prior to the divorce being finalized, good documentation can help prove that this happened.

By closing joint accounts as quickly as possible and attaining a personal line of credit or credit card, a soon-to-be divorced person can protect his or her credit. Ensure that the line of credit has a reasonable interest rate. An agreement can also be reached where one party in the divorce signs off on current joint accounts so that they remain open and in the name of the other party after the divorce.

Opening and closing accounts will most likely affect a person’s credit score, so it is important to monitor this continually during a divorce. In particular, a significant credit score drop can indicate a faulty report by a creditor or serious debt being applied to a joint account by one of the parties involved in the divorce. Both parties should use a credit monitoring service to keep track of their score during and after the divorce.

A lawyer with knowledge of the mistakes commonly made by an individual going through a divorce can help guide a client away from them. Even if a harmonious divorce is expected, disagreements may arise. An attorney will help ensure that the client has his or her financial future protected.

Source: USA Today, “4 ways to protect your finances during a divorce“, Shawn Leamon, Jan. 28, 2017