Thinking About Filing for Divorce in PA? Financial Steps to Take Now
Cou
ples who are considering getting a divorce in Montgomery County or elsewhere in Pennsylvania should be aware of some important financial considerations prior to filing the divorce paperwork. Often, even when a couple believes that their divorce will be an amicable split, financial issues arise and bitter fighting ensues. Much of this additional stress can be prevented if you take some time to consider your finances in advance of filing for divorce in PA.
Separate Your Bank Accounts
If you and your spouse have any joint bank accounts, you should close them prior to filing for a divorce in any Pennsylvania court. This will prevent your spouse from completely cleaning out the account. It will also serve to protect you, since you can be held liable if your spouse overdraws any account with your name on it.
Some people don’t separate their joint accounts before beginning the PA divorce process in an effort to avoid further conflict with their spouse. At some point in the PA divorce process, it will become necessary to separate your money and other assets. Your divorce lawyer should advise you that you will save yourself a lot of fighting and attorneys’ fees if you separate the accounts before you file for a PA divorce.
Mind Your Credit
An important financial consideration for any divorce is to determine your credit rating. You should obtain a copy of your credit report now to determine where you stand. Be aware that your credit score can plummet if your spouse decides to go on a spending spree and not pay a bill that is in your name. You need to separate your credit accounts in advance of filing for divorce in PA.
Do what you can to establish credit in your own name. As you apply for credit cards, keep in mind the different types of cards available and their corresponding interest rates and other terms and conditions.
Learn Your Insurance Needs
Since you never know when you’ll need your insurance coverage, it’s important that you take the time to gain a strong understanding of your insurance needs before filing for a divorce in PA. You want to make sure that there is no gap in your health insurance, car insurance, homeowners insurance, or other policies. The last thing you need is to find out after an accident or other unexpected loss that you no longer have coverage as a result of your divorce.
Understand Tax Consequences of Divorce
After you divorce in Pennsylvania, you will no longer file your taxes as a married couple. Instead, you must file as an individual for both federal and Pennsylvania state tax returns. The year your PA divorce becomes final is the year that your tax status must change to single. You may have new income and/or deductions to consider, such as alimony or child support. Divorce will also likely affect your head of household exclusion, deductions for your children and other deductions and credits. Be sure to consult a qualified tax professional to ensure that you are complying with all applicable laws.
Jason Martin, Esq. is an experienced PA family law attorney who assists clients seeking divorce, child custody, child support, spousal support and alimony in Montgomery County, Bucks County, Chester County, Delaware County and Philadelphia County. Contact The Martin Law Firm for a no-obligation, confidential consultation.