If you find yourself preparing for a high-asset divorce, it's important to fully understand what the process entails and how you can protect yourself along the way. Just the same, you'll want to learn more about any debt you're carrying, as this also comes into play when divorcing your spouse.
Many people who have a lot of assets are also carrying quite a bit of debt. For example, you may live in a $500,000 home with your spouse, however, you still owe $200,000 on your mortgage. This is something you must take into consideration when divorcing.
Even though you want to focus most of your attention on your assets, to ensure yourself of getting your fair share, you can't ignore any marital debt. Here are some tips to follow:
- Make note of joint and separate debts: Some debts you took on with your spouse, such as a mortgage, car loans and credit cards. There may also be debts that you and/or your spouse brought into the marriage, such as student loans and personal loans. You should clearly separate the two as you prepare for your divorce.
- Pay off debt before the divorce: You don't have to do this, but it can help make the process easier. For example, if you have joint credit card debt, you can both transfer half the balance onto a separate credit card. Or maybe neither one of you is interested in staying in your home and taking over the mortgage. In this case, you can sell the property, pay off the mortgage and split any remaining proceeds.
- File for bankruptcy: It's not an easy decision to make, as bankruptcy will affect your finances in many ways, but you can consider the idea of filing with your spouse before your divorce. With Chapter 7, for instance, you can wipe clean many of the debts that are bogging you down.
A high-asset divorce requires great attention to detail, as you want to fight for every last dime that you're entitled to. While you're doing so, don't lose track of the many types of debt that require your attention.
The divorce process is full of many twists and turns, but when you have a plan and understand your legal rights, everything will come together as you move forward.