The relationship aspect of divorce is of no real interest to the State or most (but not all) divorce lawyers. The hard core aspects of this distressing process are residency and access to the children and how to divide up the dosh.
Now one might think that this second process would be relatively easy. Tot up the assets and then devise some equitable division between the divorcing couple. Well not so. A lot can happen between those words "I want a divorce" and the final settlement. A wise divorcer or divorcee needs to watch carefully that the size of the financial pie does not diminish over this period.
Change your mindset
When the divorce becomes inevitable there needs to be a complete change of mindset. If you are the one who is being divorced then you must change from doing things that are designed to repair the relationship to ones that are designed to safeguard your financial interests.
This is a very different way of behaving and unfortunately, involves an element of mistrust of the man/woman who only days before you were trying to keep in the relationship. Not an easy change to make.
Here's what to look out for
Some of the commonest way of stealing from your partner are cleaning the funds out of a joint savings account, spending money that was put aside to pay off the mortgage, running up debts on a credit card held in your partner's name or simply just borrowing money against the joint assets without telling your partner.
What to do to curb this
Speak straight away to your bank and mortgage lender. Explain the situation and ask them to make any joint accounts require dual authorisation. The account can also be frozen so that it becomes inoperative until unfrozen. A similar conversation should be had with the mortgage lender.
The other way to handle the situation is for you to sit down together and decide to cooperate rather than compete. Disputes about divorce finances are the most corrosive and destructive and allegations of ‘stealing' by one party will only make the final negotiations a whole lot worse and a whole lot more expensive.
A joint mortgage or loan seemed like a good idea at the time
Many of these arrangements are held in "joint and several liability" which means each partner is liable for the full debt if the other cannot pay and in some circumstances if they will not pay. If one of you is more able to pay then the bank/mortgage lender may well seek all the payments from you.
The advantage of borrowing on a joint account basis is that you both have access to the account and can see that all is in order and that interest payments are being made on time. If this account is just being operated by one of the couple then it will take some time for the other to gain access to it. Thus funds could have been siphoned away for some time without being discovered.
The curse of the credit rating agencies
The credit rating agencies such as our good friends at Experian hold sway over our financial lives just as those fine folk at Moody's do over debt ridden sovereign nations. There is no escape from their pronouncements and the consequences that flow from them. Those who live in debt (and that's most of us) have no choice but to play by their rules.
It's very important to know that if joint loans are taken out then the rating agency will link the couple's individual ratings together. Thus the lower individual rating will drag down the combined couple rating. If there are problems in terms of the misappropriation of funds then the impact of the rating downgrade will remain for long after the event.
As soon as there is a problem contact a major rating agency and apply for the link with your ex partner to be broken. This is known as a disassociation which will at least free you from your undeserved ratings downgrade.
Getting the right advice at this critical time is so important
An Independent Financial Adviser (IFA) with special knowledge of divorce finance is the person to guide you through these many difficulties. Getting the financial aspect of the divorce sorted early and without rancor will make the divorce process quicker, easier and less costly. So the sooner you will be able to embark on your new life after divorce.