Organize Your Finances
One of the first things to do after you decide that divorce is in your immediate future is to organize your finances. The first step may actually involve becoming knowledgeable about your monthly household finances. Often times in my practice, I notice that one spouse is usually designated as the one who pays the bills and balances the checkbook, while the other spouse may not even know how much the mortgage payment is every month. If you are the spouse who has been in the dark about the monthly finances, now is the time for a crash course about your monthly bills. It would be wise to make a list of the amount paid for the mortgage/rent, insurance, car loans or leases, utilities, prescriptions, doctor bills, credit cards, and any other debt. It would also be prudent to make a list of expenses such as the weekly grocery bill, entertainment, activities, or gym membership. Becoming knowledgeable about your monthly finances is a key component in a divorce situation as it will help with the issue of child and/or spousal support. It is also useful to have this information when you meet with an attorney and a list of monthly expenses is required for most court forms in a divorce proceeding.
The second step in organizing your finances is to start gathering documents that will be important for your attorney and the court to review. The starting point is to gather the last three years of tax returns. The tax returns provide insight into the overall income of the family and are vital in the computation of support. In addition, it is imperative to gather the most recent banking account statements, investment account statements, life insurance statements and any retirement account statements. Gathering these documents will give you, as well as your attorney and the court, a snapshot of the assets to be equitably divided in the divorce.
Check Your Credit Report
Finally, I recommend that you check your individual credit report. Often times, a spouse may not realize that their name is on the equity line of credit or that they are tied to the car loan. In cases of financial misconduct, one spouse may have opened up credit cards or equity lines of credit in the other spouse’s name without their knowledge. It is critical to go into divorce negotiations with a clear understanding of your financial picture