In the Virgin Islands, a divorce for some consumers is a financial nightmare. The cost of the proceedings alone are high, but if the marital estate includes high volume debts, it could become far worse. A local financial advisor helps consumers create a financial plan for their divorce.
Close All Joint Accounts
Start the plan by closing all joint accounts if possible. In a divorce, an angry spouse follows strategies that generate financial issues. To avoid the issues, close all joint accounts. Close credit card accounts, checking or savings accounts, and other lines of credit that are in both names.
Monitor Your Credit for New Accounts
Before the divorce case starts, a spouse could sign up for new lines of credit that aren’t in their own name. The laws don’t prevent the action unless the couple is legally divorced. A strategic plan involves monitoring all credit reports for any new lines of credit and closing the accounts immediately. By closing the account, the opposing spouse cannot overextend the consumer’s credit and cause financial hardships.
Prepare for Tax Season
The couple’s marital status at the end of the year defines how they file their taxes. However, it doesn’t require them to file together unless their divorce agreement outlines the requirement. The only way the divorce agreement is upheld at tax time is if the couple received the final decree before December 31st. If the couple is still married without a valid tax agreement, the party that files first adds the children to their tax return and receives earned income credit.
Create a Plan for All Liabilities
Financial liabilities are paid by either party or both in some cases. A financial advisor reviews the marital liabilities and determines which debts belong to their client. The advisor helps the client set up a plan to pay off all debts in their name.
In the Virgin Islands, a divorce presents serious financial issues for consumers. To mitigate common risks associated with divorce, consumers need a financial plan when starting their case. The plans help consumers manage liabilities and tax implications that resulted from their marriage. Consumers who need further assistance contact Kirk Chewning for an appointment now.