Divorce is difficult to deal with, but a break-up can be just as bad. Dealing with the turbulent emotions that come with them is just one aspect of the moving on process. But there are also certain financial affairs that you need to tackle to ensure that you emerge on the other side with the least possible damage.
How complicated things can get depends on the seriousness of the relationship. For instance, cohabiting couples may have an apartment to split which can prove to be really complex. Following are certain steps that you should take to safeguard your finances after a break-up:
Separate credit cards and bank accounts
It is common for couples to open a joint savings account and have shared access to credit cards. In the case of joint savings accounts, you only have two options, which are the removal of your ex-partner or closure of the account. Money should be split up and each person should be given their rightful share whilst things are still amicable.
It is possible that there may come a time when either one of you or both may lose your patience and may want to wind up things once and for all. If your ex-partner beats you to the bank and empties the joint account that you held together, filing a lawsuit may be the only alternative that you could be left with to recover your money.
The same is true for credit cards as well. If there exists a credit card account on which your ex-partner is still an authorized user, you may want to revoke it as soon as possible. Merely removing them as an authorized user may not be the solution either as they may still have your credit card details. They can make use of those particulars to purchase products over the phone or online.
You can also request that the card company change your account number to prevent any malicious use of your account information. Any recurring payments which have been set up by your ex-partner should be stopped immediately.
A more convenient option would be to update the ownership of the account rather than get it closed or place restrictions on authority. Liquidation of investment accounts may bring tax bills to your doorstep and your credit score may get impacted if you decide to close your credit card.
These precautions should not only be taken with a break-up in mind but also considering the uncertainty that comes with life. Writing a will using a free will kit is absolutely necessary when it comes to safeguarding your financial assets.
Change account passwords
Besides financial accounts, the details for subscriptions, mobile phone services and any accounts, the details of which are known about by your ex-partner, should also either be canceled or updated. Assuming or hoping that your ex-partner will not act maliciously, and will respect your privacy may not be worth the level of risk that it carries.
There is nothing that you cannot undo. Even if your ex-partner has renovated his or her home using your prime credit card account, you can still get back what you lost. But the hassle of trying to get money back once it has been spent is certainly a bigger problem than taking precautions and restricting access to things, even if they are as trivial as Netflix accounts.
Take decisions regarding real estate
It is not uncommon for an unmarried couple to buy real estate together. However, when an unmarried couple decides to make a big investment such as buying a house together, they should create a contract which clearly specifies what happens to the property if they part ways in the future.
Compared to most other assets, real estate is one which can be difficult to divide post-break-up. In the case of properties that are held in joint ownership, numerous factors need to be taken into consideration such as the amount contributed by each partner towards the down payment, mortgage payment contributions and also the payments made for renovation and maintenance of the property.
Even if the property is not owned jointly, there are still many considerations to take into account. The problem doesn’t become any easier if there are children involved.
Division of personal property
Shared possessions such as household items and furniture can be split in a number of ways which shouldn’t have to involve law and force. A good suggestion regarding dividing personal possessions is that each of you takes whatever you owned before you got into the relationship.
Also, any gift given away shouldn’t be taken back on humanitarian grounds!
But these are simply suggestions as couples who break-up on a cordial note can and should sit down to discuss who gets what depending on who most enjoys or needs the thing in question.
There will always be things that both of you will be unwilling to part with. The best thing that can be done in such a case would be to sell the item and divide the proceeds. But this may not always be possible. If you had pets for example, letting the other person take them away can be more heartbreaking than the failed relationship itself.
Redirect mail
The one who moves out should certainly change his or her mailing address as you don’t want your private correspondence being delivered to an address where you no longer reside. If you are the one who is moving out, you should contact those financial institutions which regularly communicate with you and give them the new address where they can reach you.
Break-ups can sometimes be just as complicated and painful as divorces but hopefully, unlike in divorce, there will be no need to involve lawyers. The understanding that is shown at the beginning of a relationship should ideally prevail when it falls apart too.
To ensure that things do not get very ugly it is advisable to have a contract in place if their major assets involved, similar to a prenuptial agreement which is signed before marriage.
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