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How to avoid common financial mistakes in a divorce

On Behalf of | Feb 10, 2022 | Divorce

If you are going through a divorce in Texas, protecting yourself financially is imperative. There are a number of mistakes you should be aware of so that you can avoid them.

Financial information

First, it is important to understand your rights and obligations. While you may want to protect joint accounts from abuse by your spouse, you should not try to seize control of assets that belong to both of you. However, you should try to collect as many financial records as you can and keep an eye on your credit report. This information may be useful as well in case you need to work with a professional to identify hidden assets.

Proceed with caution

It is not uncommon for people to try to rush the divorce process because they find it upsetting, but this can be a mistake as well. It is better to proceed methodically and make sure that you are thorough. This includes correctly valuing all of your assets. A common error is to ignore how assets may appreciate or depreciate over time and how their value may be affected by taxes or other costs, such as the upkeep or insurance associated with a house.

Debt

Debts can be a problem because even if one spouse agrees to take responsibility for them, the other one could still be pursued by creditors regardless of what the divorce agreement says. You may want to try to refinance or pay off debts before the divorce is final so that you can fully separate yourselves from one another financially.

Texas is a community property state, and this means that most assets and debts acquired during the marriage are supposed to be split equally. There is some flexibility as to what this looks like practically, but it is important to be prepared and educated before going through the process of property division.

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