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2 key financial considerations for divorce

Divorce is something that you probably never thought you would end up going through. Now that your relationship is ending with your spouse, you have to figure out how to divide everything evenly without causing yourself financial distress. Separations are often tricky, especially when there is so much at stake.

Though you live in the San Jose area, which is a community property jurisdiction, there are ways you can reach an amicable divorce settlement with your soon-to-be ex-spouse. Here are some key considerations you should keep in mind as you go through the divorce process.

1. Decide what to do with the house

Many separating couples get hung up on who gets to keep the home. While real estate might outvalue most of a couple’s assets, it may not be prudent to hold onto it after divorce. If you purchased the property with your income combined with your partner’s, there is a strong possibility you might not be able to afford its upkeep. Before you start negotiations for who should retain ownership of the marital home, make sure you can still afford to pay the mortgage, maintenance and other associated expenses on your own first.

2. Settle joint debts

When separation occurs, it is not usually something that happens overnight. As soon as you suspect divorce is looming, you and your spouse should work on settling all joint debts and accounts. Keep track of all finances and determine what you need to pay them off. If you are not in a position to pay them off, consider paying as much as you can to lower the amount you and your ex-partner owe. You should also contact your creditors to close the accounts to prevent your spouse from racking up more debt that you could end up paying for.

Divorce may mean the end of your current relationship, but it also opens the door for new ones. Before you consider remarriage in the future, you may consider a prenuptial contract to make the divorce process easier and faster to finalize.