Here’s a financial checklist to help you during this unsettling time.
1. Open your own bank account
2. Close your joint account
Like so many points on this list, you may need to be on speaking terms with your ex in order to close your joint account. You’ll need to make sure the account isn't overdrawn before it can be closed too.
If you’re in dispute with the other account holder, it’s likely your bank will put a stop on your joint account so no money can be withdrawn until a resolution is reached. It’s important to have money put aside in case this happens.
3. Cancel joint credit cards
Start by cancelling all direct debits and working out a plan to pay off any balance still outstanding. Once the debt on the credit card is cleared get in contact with your bank to cancel it and close the account.
Depending on the arrangement you have with your bank you may both need to agree to close the account or just one of you may be able to do it.
4. Update rental agreements
You’ll need to update your rental agreement if one of you has moved out, and discuss how future payments will be made. You should also agree on who will receive the bond or how you divide it at the end of your lease.
5. Joint home loan considerations
These will depend on what you both agree happens to your jointly owned property. During your negotiations, think about what will happen to any funds in an offset account linked to your home loan. If you both decide to sell the property, you’ll need to pay out your mortgage. But remember, if you repay a fixed rate home loan before the end of the fixed rate period you may need to pay an additional amount in the form of an 'Early Repayment Adjustment (ERA)' – this can be a substantial amount.
If, on the other hand, you buy your ex’s share of the property, you may be able to refinance your home loan, provided you’re able to prove you can comfortably make the repayments.
If you have a home loan with us, you can make an appointment with a lending specialist to discuss this.
6. List joint assets and liabilities
Dividing your assets and agreeing who pays what for joint liabilities can be among the most challenging aspects of ending a relationship.
It’s a good idea to seek professional advice. Check out MoneySmart for more info.
Determining how super is to be divided is generally done either through a superannuation agreement or court order. Here’s more about splitting super.
8. Update will and life insurance
You may want to change the beneficiaries of your will and/or life insurance as a result of your relationship breakdown. Unless you update both, your wishes before your separation or divorce will be honoured.
9. Change your passwords
This often gets forgotten, but it's important to change your passwords regularly. If you bank with us, you can update your details in Netbank and the CommBank app.
10. Check your credit score
You may need to apply for credit to help you get back on your feet. To improve your chances of getting credit approval, here’s how to check your credit score and make sure it’s correct. Knowing your credit score can also help you understand how much – or how little – a lender might offer.
Splitting from your partner is often a difficult, emotional time. There’s help out there if you’re experiencing financial hardship. If you bank with us, please get in touch. We can help if your circumstances unexpectedly change.