Financial points to keep in mind during a divorce

Jean-Guy Turcotte

I’m not certain where this statistic comes from, but they say that almost 50% of marriages end in divorce.

When a couple decides to divorce, the financial assets accumulated while together must be split evenly and usually the most valued asset is the matrimonial home.

During these difficult times both parties should seek out the proper legal advice and even if the split is going badly one must do all that they can to keep their financial affairs in order by following a few easy steps.

Firstly, make sure that you keep your bills paid up to date throughout the settlement process.

Even though there a lot of raw emotions that may come up through these proceedings there are still joint bills to be paid, and not paying them will likely be more detrimental to both of you should it not be looked after. Recent slow or missed payments will make it either more expensive to downright impossible to refinance the matrimonial home or obtain a new mortgage.

If one side is paying all the bills, then one can seek re-imbursements from the other while going through the settlement phase, so keep all of your receipts.

Second, separate your joint account as soon as possible and check your credit reports to ensure that nothing is missed.

Regardless of what you and your ex-spouse have agreed about who is responsible for paying a bill, a missed payment on a joint account will hurt both your credit ratings equally.

If all or most of the credit has been in your spouse’s name, then set up some credit for yourself to ensure that in the foreseeable future you’ll be able to buy a home on your own.

Third, no lender will provide you with a mortgage until a separation/divorce agreement is completed.

Reason being is the lender cannot clearly understand all of your financial obligations until that agreement have been made. The separation/divorce agreement will outline who is paying which bills, what assets are split, custody agreements, child support and alimony payments in a clear and concise manner for everyone to understand.

When it comes to the matrimonial home, the first step is to figure out the value of the home.

This can be done by hiring an appraiser or speaking with a mutually accepted realtor and coming to an agreement on the value. If an agreement on value can be reached, one party can buy out the other or the property can be disposed of.

For the most part the equity in the property will be split evenly amongst each other unless there are some outlying conditions to be met.

If your spouse is buying out your equity and paying you your equity share, ensure that you get confirmation that your name is no longer registered on title and name being taken off of the mortgage.

While getting through a divorce is often unpleasant, there are some steps that can be followed through with to ensure that at least your financial affairs are looked after because you still have to look after yourself after this is said and done.

(Please note, I’ve provided information based on my experience while dealing with couples going through a divorce, BUT is not to be taken as legal advice. Please consult a lawyer for any final decisions related to your divorce.)

Jean-Guy Turcotte is an Accredited Mortgage Professional and can be reached for appointments at 403-343-1125, texted to 403-391-2552 or emailed to jturcotte@regionalmortgage.ca.

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