A relationship breakdown can be difficult and painful for everyone involved.
While most people's immediate concern is dealing with the emotional fall-out it's important to understand how a divorce or break-up can affect your finances, and what you need to do in order to protect your interests.
Protecting your financial position
Regardless of what terms you are on with your ex, it's important to establish a clear idea of where you stand financially and then take steps to protect what is yours. Speak to a lawyer straight away, change your online banking passwords and put a freeze on joint accounts until an agreement can be reached. Remember you will be equally, legally responsible for all credit cards and loans that are in both of your names and for any loans or credit that you have stood guarantor for, for your previous partner. This website has some great information on what to do after a break-up.
Handling a mortgage
There are several elements involved in the successful managing of a mortgage throughout a break up. Firstly, work out a short-term solution to paying the mortgage in the interim between ending the relationship and dividing/selling assets. Your first step should be contacting your financial institution, as many have a specific protocol for dealing with separations, and may even be able to put a hold on your repayments until the issues have been sorted. In the longer term, you will have to decide if one partner is going to buy the other out, or if the home will be sold and divided.
When a business is involved
Couples often go into business partnerships together. Many small businesses are owned by people who are in a relationship, and the dissolution of the romantic side of things definitely signals a change in protocol for the running of the business. Depending on the situation, this could mean a complete breakdown of the business as well, or it could mean maintaining the professional relationship without a romantic one behind it. Either way, you both need to get very serious about seeking legal advice on what responsibilities and rights you have in regards to the business. Hopefully you have a severance agreement that you put in place beforehand that will help you both exit or move forward gracefully. Read more about breaking up a business here.
Prepare for the worst and the best
Even if you're not breaking up, it's wise to consider how your finances would stack up if you were unexpectedly single. Consider, having independent savings. Make sure you are not responsible for loans or credit you couldn't pay off if you were living solo. Know where your super is and if you have joint Wills and financial agreements, find out what and where they are.
Remember relationships can end but looking after yourself financially means that you can safeguard your money while you move on.
This information is current as at 12/11/2014.
BT Financial Group - A Division of Westpac Banking Corporation. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not constitute financial advice. It has been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation and needs. Information in this blog that has been provided by third parties has not been independently verified and BT Financial Group is not in any way responsible for such information.