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It’s over – splitting your finances

Posted 10 March 2016

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If your relationship is over and you need to sort out your finances, but you don’t know where to start, we can help.

In yesterday's blog, we ended at the point of telling you who you should call and why. So, without further ado, here’s the list of people you should contact when you’re splitting your finances. 

The people you need to contact are your:

bank – it’s wise to do this as soon as possible, especially is there’s cash or an overdraft available. You may also want to ask that any telephone or online banking services are withdrawn for the time being. If the split is particularly acrimonious, you could ask that the bank only allow withdrawals when you’ve both agreed to it. Or you could put a stop on the account altogether, which is called freezing the account, but you should only do this if there’s no other way to protect the funds you have in the account. If the bank account is frozen, it’s worth knowing that to unfreeze it, you’d have to have a letter signed by both of you.     

As a general rule if you’re not married, any money in a joint current account belongs to the person who paid it in. But, there are some exceptions to this rule, so if you think you have a legitimate right to the money in your bank account, you should find out if you’re able to make a claim for it. 

mortgage provider – if this is not your bank, you should contact your mortgage provider separately and tell them about your current situation. There are a number of options you can think about for your family home:

·         You may want to take over the mortgage payments yourself and keep your home, effectively buying your partner out. This will only be possible if your mortgage provider thinks you’ll be able to keep up the payments. This route does allow you to break all financial ties with your ex-partner, which can be beneficial if they have a less-than-perfect credit score.

·         Your partner may be willing to continue to pay for the mortgage, especially if you have children together who still live in the property.

·         You may want to sell the property and divide the money between you. 

·         You may want to have part of the value of the property transferred to the partner who’s deciding to leave, so if the property is eventually sold they’ll get a share of the profits made on it.    

credit/store card companies – although you may both have a credit card, the agreement is only in one person’s name. That person should contact the card provider and ask them to put a block on the other person’s card. It’s best if you let them know that you intend to do this, just in case they are relying on it for something and you make their situation, and the separation as a whole, much more acrimonious.     

insurance – if there are insurance policies in both your names, think about car, travel or home insurance, you should call your insurer and ask them what they’d find acceptable as a means of removing your ex-partner from the policy. They may be happy with a simple signed letter confirming the change.  

pensions – in England, Wales and NI, if you were co-habiting, any pension you’ve gathered will remain yours. If you were married, the pension amount may be split. You could have pensions provided by your workplace or they could be schemes you’ve arranged by yourself. The total value of both your pensions, excluding basis state pension, from before and after you were married will be taken into account.

If you live in Scotland only the pension you’ve accumulated during your marriage or civil partnership will be taken into account if you split. Any contributions given before the marriage or civil partnership, and anything saves after your official date of separation will not count.      

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The way that pensions can be split when you divorce is complex, including being able to offset the amounts, defer payments and create attachment orders. So, we’d advise that you seek the help of the pensions advisory service. They can offer free advice and a mediation service for helping you resolve all of your pension worries.

landlord – whether you need to contact your landlord depends on whose name is on the tenancy and whether you are married or not. If you’re not married and the tenancy is in your name, you have the right to remain in the property and you will be fully liable for the rent. You can ask the other person to leave at any time. If the tenancy is in both your names, you need to decide who will remain in the property and let the landlord know that one name needs to come off the agreement. Your landlord will have to agree to the new terms and may want some proof that you’ll be able to pay the rent by yourself. If the tenancy is in your ex-partners name, things can be a little trickier, and in this instance, it would be best for you to speak to a specialist in housing law. You can access free advice on housing law from Shelter and if you need help sorting out who is going to stay, you should seek the help of a mediator, such as the Family Mediation Council.

Make a list of what you own 

It may seem silly, but if the split becomes really acrimonious it may be useful to have a list of what you own and what your ex-partner owns. You could even take photos to prevent any misunderstanding, when it comes to dividing up the contents of your property. In England and Wales, as a general rule, you will get to keep what you own, but that doesn’t mean that your partner can’t make a claim on it.  If you’re separating or dissolving a marriage or civil partnership in Northern Ireland, any money in a joint account will belong to you both equally. The only way this would change, would be if a court decided it.

If you live in Scotland, any money that you paid into a joint account whilst you were married or in a civil partnership is usually shared equally between you both, unless you can prove that you paid in more money than your partner, in which case, you may be able to claim a larger share of it. If you were living together, but were not married, any money that went into the account for paying everyday expenses would be classed as belonging to your both.    

You should include everything that’s yours, or that you have a joint claim to, that includes physical property as well as savings, bonds, shares and the like too.

Don’t do anything you’ll regret

Doing anything that would cause your ex-partner unnecessary financial problems would be a mistake, as it’ll only make matters worse. As would agreeing to make the monthly payments on things and then not doing it. As we’ve already mentioned earlier, the other thing you should avoid doing, unless you feel you need to in order to protect yourself from being left penniless, is freeze a bank account that you both access to.

Okay, we hope that’s given you a head start on sorting out your finances after a split. But, do bear in mind that this is not a complete list, you may have other financial assets, such as shares, you need to divide up. If you do, we’d advise that you get help with this, as the law for these are can be very complex.  

 

If you’re struggling with unmanageable debts and you’d like to speak to someone about using a debt solution to help, just use the ‘contact us’ options on the left.   

by Shelley Bowers

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.