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How to Financially Survive a Divorce

May 24, 2011
3 mins
An older man shows a woman her options using a tablet

Just last week I was dishing out advice on how to manage your money after marriage. Here we are, one week later, divorced. How sad. The reality is that 40% of all Canadian marriages end in divorce – quite a significant number. And it’s said that most of those divorces are caused by disagreements about money. If divorce is on the horizon, the very first thing you need to do is check your emotions. Logic and reason will get you through your divorce; anger and fear will only make things muddier. Just like business and pleasure don’t mix, neither do feelings and finances.

Take precautions

Generally, one member of the couple is responsible for the household finances. If you are not this person, now is the time to familiarize yourself. Do a little research. Heck, do a lot. Learn about your bank accounts, your mortgage – whatever you’ve left to your spouse. What you don’t know now, could cost you later.

How to prepare for divorce

Most couples know when divorce is just around the corner. If it’s obvious that your marriage is going to end badly, it might be a good idea to prepare yourself in advance. Knowledge and preparation can lessen the financial impact of divorce.


  • Start saving – you’re going to need the extra cash to rebuild your life.
  • Close your joint accounts and open individual accounts.
  • Close any unused accounts you may have


  • Cancel your credit cards – get new ones in your own name.
  • Pull your credit report.
  • Take measure to reestablish your credit rating (a secured credit card can help you do this).
  • Notify creditors of your marital status.
  • Live within your means and deal with outstanding debt first. Until it’s cleared up, you are still responsible for any joint debt you’ve accrued.

Reclaim your name

  • Change names on house deeds, stocks and bonds, and car titles
  • Change beneficiaries on investments, retirement plans, life insurance policies, and savings accounts
  • Update your will

The great divide

Now comes the hard part. As a couple, you’ve amassed all sorts of stuff – not just material possessions, but debt and assets, as well. All of this ‘stuff’ needs to be divided equally. In order to accurately assess your debts and assets, you’ll need to gather documentation that supports both.


Generally speaking, it’s easier for couples to divide their assets than it is their debts. There are a number of ways that you can divide your assets: amicably, by bartering, or by selling it off through the use of mediators or arbitrators. If you choose the latter, you simply sell everything and then divide the proceeds. Some divorcés choose to sell their homes and then use the proceeds to pay off any outstanding debt. This leaves them free and clear, ready to begin their new lives, debt-free. Your assets include the following:

  • Income – pay stubs for the past 3-5 years
  • Banks – Bank statements for all bank accounts, joint or individual.
  • Investments – Statements for all accounts, including RRSPs, RESPs, pensions, and insurance policies.
  • Vehicles – Get estimates for all vehicles, road and water.
  • Other valuables – Don’t forget that valuable jewelry or artwork.


Typically, debt is a much harder to split than assets. Nevertheless, it has to be done. A word of advice: make sure to pull a credit report. Sometimes an angry spouse, sensing that divorce is on the horizon, will rack up substantial debt. Unfortunately, unexpected or not, you are still responsible for this debt. Your debt includes the following:

  • Mortgage – You’ll need a statement that outlines the terms and your current balance.
  • Credit cards – You will need current statements for all cards.
  • Loans – Student, car, or line of credit, all loans need to be accounted for.


Divorce – it happens, and when it does, it hurts. But it doesn’t have to hurt your wallet. Knowledge is power, so if you aren’t the one in your family who manages the finances, now is your time. If you educate yourself and take a few precautions, you can reduce the financial impact of divorce. Stand up, dust yourself off, and continue living. Life’s not over yet.


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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