Separation or divorce
How can you manage your money during a separation or divorce?
Getting separated or divorced is extremely stressful – emotionally and financially. Dealing with your finances and shared commitments as soon as possible can help you take a positive step towards getting your life back in order. You’ll need to prioritise decisions about your home and mortgage, review your budget to reflect your new circumstances and sort out joint accounts, loans and insurance policies.
Listing debts, agreeing who pays what and contacting lenders early can help prevent further financial difficulty. Using the CCPC budgeting tips and tools and getting independent legal, financial or debt advice where needed can help you stabilise your finances and make informed decisions during a stressful time.
Make home loan or mortgage matters a priority
If you and your former partner have a mortgage or a home loan together, deciding what to do about your home can be difficult.
- If you’re married or civil partners, mortgage decisions will form part of the legal separation agreement.
- If you’re not married or civil partners, it can be more complicated – especially if you didn’t agree what would happen in the event of separation.
- If you qualify as a cohabiting couple, you may have certain rights if you were financially dependent on your former partner. Written financial agreements are legally recognised.
Where can you get advice?
- Contact a solicitor for help with dividing your home, mortgage and contents.
- Speak to a financial adviser to make sure you understand your choices.
If you want to stay in the house and take over the mortgage, you’ll need to apply for a mortgage in your own name. Your partner cannot simply be removed from the old mortgage. It has to be taken out in your name. If you owe more on your home than it's worth (negative equity), talk through the options with your former partner and your lender.
How do you assess your new financial situation?
As your circumstances change, it’s worth taking a fresh look at your money and how you manage it.
Start by:
- Recording where your money goes
- Figuring out where you might save or cut back
- Planning your costs over time
- Confirming what you can afford now
- Using our budget planning advice page to help you
What should you do about joint accounts and insurance?
If you have a joint bank account:
- Pay off any outstanding household bills
- Decide whether to close the account and split the money or keep it open
- If keeping it open, ask your bank in writing to change the account into one name
It’s a good idea to review your insurance policies.
- You may need to change or cancel them.
- If you have a joint life insurance policy, cancel it and take out a new one in your own name if needed.
- Please visit the insurance section for guidance.
How do you deal with joint debts and short-term money problems?
If you and your former partner have joint debts (credit cards, loans, car finance), you’re both responsible. If you missed repayments, it will affect your credit rating. Visit the Money Advice and Budgeting Service (MABS) for help.
What to do:
- List all debts
- Decide who will pay what
- Contact lenders to inform them of your plan
- If debts aren’t paid, lenders can take both parties to court
Short-term help
If you’re struggling financially, remember that you can contact the Money Advice and Budgeting Service (MABS).
One possible solution might be to seek a short-term personal loan. Try to choose the best one for you – that will be the one that costs you the least. You can find that by looking for a low annual percentage rate (APR). That means the lower the rate, the less the loan is going to cost you.
Use both the Personal loan money tool to compare rates and the Loan calculator to estimate repayments and help you with your decisions.
