By Jane Brown

Divorce is difficult under the best of circumstances, even if you are parting on good terms. When there are children involved it can be doubly difficult because your family unit is changing, and the kids won’t understand why. Even when you have managed to move on, from the emotional fallout of the divorce, you could still be left with the financial effects.

In some ways, the financial effects could be more serious than the emotional, because they can actually affect your ability to support and provide for your children. Financial problems can also contribute to the emotional rift between you and your ex, which can then affect the emotional wellbeing of your children.

Money Issues and Your Marriage

If you were like a lot of American marriages, one spouse, often the male, earned more than the other. He may even have been the sole breadwinner. Additionally, you might have consolidated your finances with joint bank accounts and joint lines of credit.

As long as you stayed together, and things were going well financially, having everything together wasn’t a problem. However, if your finances took a turn for the worse, having joint everything dealt a serious blow to both your credit profiles. Those financial and credit problems could also have contributed to your divorce.

In fact the CDC indicates that, of the approximately 3.6 percent of marriages that end in divorce, 22 percent of couples cited financial problems as the primary reason.

Money Issues and Divorce

If you are divorcing due to financial problems, those problems don’t disappear once the divorce is final. In fact, if you had joint credit accounts, you will both be responsible for that debt until it is paid off. If one of you files bankruptcy, or is otherwise unable to pay, then the responsibility for the entire debt could fall on the other’s shoulders.

In a situation where both parties are employed, being responsible for the joint accounts may not be an issue… so long as both parties are able to pay the debt. If not, then both parties could take serious hits to their credit rating from late and missed payments.

Even if you don’t have excess debt, having joint accounts could cause other problems down the line, such as one partner continuing to access the line of credit during the divorce proceedings. For this protection of both parties, it’s best to address any joint accounts before initiating divorce proceedings.

Addressing Joint Accounts

One way to address your joint credit accounts is to pay off the balance, then close the accounts. That way, the debt is gone, and the accounts are no longer in either of your names.

If you have multiple joint credit accounts, you can decide who will be responsible for which account. Once you have done that, you can each open a new, individual account, initiate a balance transfer, and close the old joint account.

You would do something similar with a home mortgage. One partner could refinance the home in his or her name alone, and transfer the deed, thereby taking sole ownership and financial responsibility. Or, both parties could sell the home, use the proceeds to pay off the existing mortgage, and split the rest.

Regarding joint bank accounts, both parties can open their own bank accounts then close the joint account and split the funds in an equitable fashion.

Of course, because emotions tend to run high during a divorce, it’s best to enlist the aid of a neutral party, such as a lawyer, accountant, or credit repair company, to help you divide your accounts. Doing so will not only make life easier on you, it will keep the emotional fallout, from bickering over money, from trickling down to your kids.