Breaking Up Is Hard to Do, But Don’t Let It Destroy You Financially

Celebrity divorces – particularly messy, scandal-ridden splits – always make good fodder for the international tabloids and the entertainment “news” shows. There’s no doubt that divorcing celebrities exist on a completely different plane than most of us, and although they most assuredly have emotional issues to deal with as their breakup progresses, they are not likely to suffer much financially. That’s not the case with the average couple contemplating divorce in the UK. Though we can’t speak to the emotional pain of ending a marriage, we can discuss some ways to minimise the financial stress associated with a parting of ways.

Be aware of the issues that divorcing couples face and must resolve

Although the UK divorce rate has fallen in recent years overall, the number of “silver splitters” – those aged 60 and older – is rising. And since older people have typically accumulated more assets, the financial aspects of divorce can be especially tricky. While theoretically more mature divorcees might be more comfortable starting over in a less-encumbered lifestyle than their younger counterparts, and thus not suffer the same level of emotional distress, figuring out an amicable way of dividing a lifetime’s worth of relationships, accumulated possessions, and tangible assets can be complicated – even devastating – to those who have long taken such things for granted. This is especially true where grandchildren are in the picture.

But younger couples have their share of tricky issues too, most notably if they have young children, especially if one parent has abandoned the workforce to stay home and care for the children. The issue is further complicated if there are shared accumulated debts, a joint mortgage, or other assets in which there is some equity value. In many cases, the partner who has the greater income will be required to assume responsibility for paying outstanding debts, as well as providing financial support for the partner whose earnings are smaller, and financial support for the couple’s children. Knowing what lies before you on the divorce path can help you to better prepare, and make the process less painful.

Be aware of effects on your credit going forward

There’s no doubt that divorce can be financially as well as emotionally painful. But you have to look beyond the stress and pain and be practical. Now more than ever it is paramount to keep apprised of your credit report. You should check it often to have any errors corrected. You will also need to make sure that you and your former spouse’s files are actually separated in the credit reporting agencies’ files, because if one spouse has poor credit, it can and probably will reflect negatively on the spouse with good credit if the reports are not completely independent of each other.

If you’re the one with a poor rating, make it a priority going forward to build or rebuild your credit. Be careful about taking on debt. If you come to a point where you need a loan and you have bad or no credit, you have choices, but do your research and choose carefully. Fortunately, there are credit options for people with bad credit, but you will need to take the time to compare those options and select the one that best meets your needs. And once you have taken on a debt, if you will handle the debt responsibly and repay it on time and according to the terms of the loan, it can be a positive first step to strengthening your credit and making your fresh start less stressful.

Know all of your rights

Divorce can be a bewildering and complex undertaking, but it’s important that you go into it armed with information. The Citizens Advice page devoted to Ending a Marriage is a good resource, as it has links to pages that cover a range of topics of particular import to divorcing couples. Whether you intend to separate informally outside the court process, to formalise the split by drawing up a separation agreement, or officially end the marriage with a divorce, will depend greatly upon your unique situation. A few major considerations that will dictate how the split is handled include whether you have children, whether you have significant shared assets and liabilities (debts), and whether you can amicably divide the various possessions you have accumulated, both as a couple and prior to the marriage.

Neither the information on the Citizens Advice website nor that which is included in this article is offered as a replacement for competent legal advice, but the links can help you begin sorting things out so you can make the best choices and be better prepared to deal with the issues that will arise as you proceed with the split.

It would be dishonest to imply that ending an intimate relationship – especially a marriage – is going to be painless, but by being aware of the many details to which you must attend as you approach the split, you can make a difficult process as pain-free as possible.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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