Five ways to protect your finances if you get divorced

Sarah Coles is head of personal finance at Hargreaves Lansdown.

As the holidays give way to the post-Christmas comedown, divorce season accelerates.

On the first business day of the year – January 6, 2025 – we traditionally see a wave of divorce filings from people pushed to the brink after spending the holidays together.

What is just a date on the calendar for divorce attorneys can be an incredibly stressful time for couples going through the trials of divorce.

The good news is that by putting things into motion, you can imagine the light at the end of the tunnel, where this no longer takes up all your time and energy.

The bad news is that there are a lot of tunnels to go through first, so you have to do what you can to keep your finances intact.

On average, we divorce 12.9 years after marriage, so there’s still plenty of time before things get complicated.

When you start the legal process, you may feel like you already have enough on your mind as you stay on top of the legal side of things.

However, there are steps you need to take now to protect your finances as well.

1. Prepare an emergency budget

Your first priority is damage control. People often incur debt after a divorce because they are splitting the same income between two households – while at the same time paying for what can be an expensive process.

It makes sense to draw up an emergency budget to save as much as possible on expenses during these first difficult months.

2. Talk to your ex about the mortgage

This also applies to any other joint debts, such as car financing.

If you are both on the mortgage, you are both liable for the full amount. To protect your financial position, you should try to maintain payments in the short term.

If possible, try to agree on this among yourselves. If your ex refuses to pay his share, or you’re having trouble paying yours, talk to the mortgage company and see if they’ll allow you to pay interest only for a set period of time, or take a break while you do something arranges.

> How to deal with debts during a divorce

3. Consider joint accounts

If you are deposited directly into a joint account, make sure the money is paid elsewhere. If bills, rent or the mortgage come from the joint account, provide an alternative way to pay them.

Tell the bank that manages your joint account about the split. They can make an arrangement so that you both have to agree to money being withdrawn.

Likewise, they can put in place debt controls to prevent either of you from abusing joint agreements.

4. Check your credit cards

There is no such thing as a joint credit card. If you both have a card on the same account, one of you is the primary cardholder and the other has an additional card.

If you are the primary cardholder, you are liable for expenses on both cards.

If this is the case, it is wise to block both cards. If your ex uses the card for everyday expenses, they need to know as soon as you do so they can find an alternative.

5. Get a grip on the value of what you own

The divorce process involves dividing your assets, so you need to understand the value of it all. This also includes pensions. In many cases it is one of the largest assets built up during the marriage, often largely in the name of one person.

Couples often offset assets, but it’s important to appreciate the value of what you’re giving up and what it costs to replace it.

It may be worth talking to both a financial advisor and a lawyer. This comes at a cost, but if they set you on the right course it can pay for itself several times over in the long run.

> How to split pensions in the event of a divorce: the three most important options explained