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Financial Separation

Financial Separation

Posted by Avery Zeidman | Published February 28, 2015

The end of a relationship can have varying effects on people. Some people may be jubilant and relieved; others may be heartbroken and bitter.  No matter the feeling, a separation is emotionally, physically and financially taxing.  Depending on the circumstance it can become a lengthy process and having the right legal representation is the first step to getting your case fairly resolved.

In a previous article, we stressed the importance of financial agreements. If there is one in place, it can make the entire process easier but if there isn’t one in place, it can cause insurmountable damage that can impact the family dynamic for years to come, especially if children are involved.

While finances may be an uncomfortable issue to address, it is essential in a separation. Both parties have rights in any marriage or common-law relationship and ensuring that each person is treated fairly is an important step in attaining a fair resolution, which can allow the healing and separation process to begin.

Below are a few suggestions that can help you with your decision for a financial separation.

Record Keeping: It is advisable that you keep copies of your financial records. These include bank statements, tax returns, insurance plans and any other pertinent documents.

Acceptance and Calm: People can react very negatively when operating from a place of anger.  It is advisable that you seek therapeutic help in order to adjust to the new and impending circumstances.  Succumbing to rash behaviours like racking up more debt or hiding assets will only hurt all those involved (including children).

If there are children involved, it is advisable that you get a mediator if a compromise cannot be reached.  Child support is a long-term commitment that should not be fuelled by vengeance.  A separation should be treated carefully; there should not be a “take no prisoners” mentality.

Initial Steps: Whenever the decision is made to formally separate, the outside world still operates as if you are still married until they are notified otherwise.  Any joint accounts should be closed and reopened separately, and for instances where there may be balances owing, written notification is required to notify the bank of the impending separation as there are actions that can be taken on their part to resolve those account balances. 

Your John Hancock: Everything needs to be in writing.  Although a couple may amicably come to the decision to split balances fairly, it is still advisable that you talk to a creditor.  Have whatever arrangement that is made documented and signed by the relevant parties.

Even if debts are allocated to one person in a divorce settlement, it does not override the joint obligations that a married couple have to their creditors.  If one party is delinquent in their payments, the other party can be held responsible and liable to the financial institution. 

Knowing is truly half the battle in this case.  There are steps that you can take to ensure that your best interest is served during the tumultuous time that can accompany a separation.  Call us at Zeidman Law and allow us to assess your case with a free initial consultation.

 
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