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7 Important Ways to Financially Prepare for Your Texas Divorce

I am often asked by clients and potential clients about things that can be done to get ready for a divorce. I have written various articles on this topic before and I will put links to those articles at the bottom of this one. One of my recommendations to those facing divorce is to start trying to separate finances.

It is not uncommon for a divorce to throw those involved into financial turmoil. If a divorce participant is not careful they may be blindsided with bills they are unable to pay, bank accounts that have been emptied, or credit cards that have been maxed out by their spouse.

If you are about to file for divorce or suspect your spouse is about to file in the foreseeable future, it is important to take the time to carefully plan and think through financial matters. Taking a small amount of time ahead of time can allow you the breathing room you need to make important decisions during the divorce and not make a bad decision because you are struggling financially.

Important pre-divorce do’s include:

  1. Open your own separate bank account

Open your own separate bank account

An important and easy pre-divorce do is to have a bank account to which your spouse does not have access. This is important because:

  1. It will allow you to set aside some money for basic living expenses in case things turn hostile between you and your ex, or
  2. It will also protect you from your ex draining a joint account
  3. You won’t raise any red flags with your spouse should you need to make a large bank account withdrawal for something like a deposit on an apartment or your divorce attorney’s retainer fee.

A separate bank account is important step in gaining financial control and independence prior to your divorce.

Separate any joint credit cards or loans

One of the next steps you will need to take to protect yourself financially is to remove your spouse as an authorized user from any joint credit cards or loans.

I have represented more than one client who did not take this important step and their ex charged up the joint credit cards and had no intention of paying on these cards during the divorce because they were only an authorized user. This mean their credit would not be hurt if they did not make any payments. However, my client’s credit would be. We, were able to help are clients by getting more of the marital property later on. However, our client who could have avoided this headache and additional financial hardship during the divorce had they removed their ex has an authorized user early on.

Another consideration is if there are any joint debts that you cannot remove your ex from such as a home equity credit line you may want to pay this debt off and close it out. This could prevent trouble down the road.

For example your spouse gets the house and that credit line is still in place. You spouse could always charge on that credit line run into financial trouble and you are on the hook for the debt with the bank. That is a very precarious situation to be in.

Obtain a Copy of Your Credit Report

As discussed above there have been times in divorce, where one of my clients has discovered their spouse has used that person’s name and credit to secure loans, credit cards, etc. without telling my client about it first. Obtaining a credit report will allow you to find out about any unknown debts earlier rather than later. There are many places to obtain a free copy of your credit report for off of the internet.

Separate any insurance policies

Another important step you should think about to financially prepare for divorce is how are you going to handle insurance policies. It is not uncommon for spouses who separate or going through a divorce to cancel policies on their ex. This means you if you are not careful you could find yourself without insurance:

  1. On your vehicle
  2. Home
  3. Yourself
  4. Your children

There are a few things you can do to protect yourself including:

  1. When you file for a divorce ask for a Temporary Restraining Order which prohibits the cancelling of insurance policies.
  2. Obtain separate policies on anything you are concerned about your spouse cancelling or removing you from.

The first option is generally enough to prevent a spouse from cancelling insurance policies. However, it is not a perfect solution in situations where:

  1. There is a delay on getting a spouse served with divorce papers
  2. You separate and do not file for divorce
  3. You spouse might ignore a court order

Regardless of whether you decide to stay on your current insurance policies you need to start investigating new policies that will not count on your spouse insuring you.

If you have life insurance, you need to decide whether you still want your spouse to be the beneficiary or do you want to update that information. If you do decide to keep your spouse as your beneficiary after the divorce that will need to be reconfirmed. You can read more on that topic in my blog article “$300 Divorce Cost a Man $100,000 in Texas.”

Your bills

It is not uncommon for clients and potential clients I meet with to overlook how bills are going to be handled during the divorce. At least until they realize their spouse has either cancelled or is refusing to pay the bill for:

  1. water for your home,
  2. electricity
  3. gas
  4. or your mortgage
  5. phones

These are all things you will not to think about and have a strategy on how you plan to protect yourself during the divorce. Some of the things to think about include:

  1. How you will pay bills
  2. Maybe you want to transfer certain bills to your name
  3. Maybe you want to open new accounts for things like cell phones

Big Purchases

If you need to make a big purchase such as a car you should do so prior to filing for divorce. Once you file an automatic standing or temporary restraining order may go in place prohibiting you from making any major purchase or liquidating assets until further court order.

Education and Job Training

If you supported by your spouse, you will need to start planning on how you will support yourself during and after the divorce. Updating your skillset or education is a way to protect you now and after the divorce.

Even if you get temporary support during the divorce it is harder to get after the divorce in Texas and generally the court will look at what efforts you have made during the divorce to try and support yourself.

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Adobe Stock 62844981[2]If you want to know more about what you can do, CLICK the button below to get your FREE E-book: 16 Steps to Help You Plan & Prepare for Your Texas Divorce

Other Articles you may be interested in:

  1. 6 Tips - On How to prepare for a Texas Divorce
  2. Roadmap of Basic Divorce Procedure in Texas
  3. Child Custody Basics in Texas
  4. 6 Mistakes that can Destroy Your Texas Divorce Case
  5. 10 Quick Tips About Parental Visitation
  6. Does it Matter who Files First in a Texas Divorce?

Law Office of Bryan Fagan, PLLC | Houston, Texas Divorce Lawyers

The Law Office of Bryan Fagan, PLLC routinely handles matters that affect children and families. If you have questions regarding divorce, it's important to speak with one of our Houston, TX Divorce Lawyers right away to protect your rights.

Our divorce lawyers in Houston TX are skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan, PLLC by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan, PLLC handles Divorce cases in Houston, Texas, Cypress, Klein, Humble, Kingwood, Tomball, The Woodlands, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.

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