The last thing anyone wants to think about when a relationship breaks down is money, and yet, it’s the number one consideration for most of us.
As someone who’s been there (I separated from my ex-husband a decade ago), and someone who’s seen a lot of friends separate, I know that everyone wants to ensure that they get what they’re owed. But for many people, there’s a deeper concern: What do I do with joint debt?
Naturally, no-one wants to be burdened with a debt – a mortgage, a credit card – which is in joint names with a former partner. We usually have enough baggage from the relationship without still being tied to each other financially afterwards.
In my experience, joint debt is a lot more common than people admit. There’s tax debts, car loans, mortgages, credit cards, unsecured business loans, just for example. Whatever the debt is, at one point most couples made the decision to get into it; and it can be even trickier if the debt’s in just one partner’s name, but it was implied in the relationship that it belonged to both parties.
Mandy Nolan talks about your next steps following a split. Post continues.
From what I’ve seen, an understanding of where the money and debt is in every relationship, whose name it’s in, and who has access to it, is so crucial for everyone to move forward. Even if you think you’re fully aware, double-check: I’ve known people to only become aware of the extent or existence of a debt after a separation.
Those situations are not pretty – so you really need to be prepared by getting a proper understanding of what your financial status quo is. Using a tool like the Westpac Divorce and Separation Checklist can make that really easy to do.
Because this is the thing that a lot of people don’t realise: banks, such as Westpac, know that life changes significantly after a separation, and they actually want to support their clients through the transition. That includes, depending on the circumstances, helping with access to extra funds for urgent matters, and negotiating temporary terms for repayments. Talking to your bank early can help your figure out your financial position and plan for financial stability in your next stage.
Here are some of the other things the Westpac Divorce and Separation Checklist covers, and some things I’ve learned from experience, you should consider if you’re in that situation: