Close Your Joint Accounts
First, you need to close any joint accounts that you both had. If you are not married, you should have separate accounts and a joint account only for household expenses.
However, if you combined accounts, you need to close all accounts and split the money you both contributed fairly into a savings account. You have to remember that if you have automatic payments or direct deposits tied to those accounts, you will need to change them. This can be difficult if you are not separating amicably, but it is a very important step in the process.
Decide Who Gets the House
If you are renting, you will need to decide what to do about your lease. For the lease, you can either buy it out and split the costs or see if the landlord will allow you to transfer it to one person’s name for the duration of the lease.
It is important not to leave your name on any legally binding contracts – like rent payments – if you are no longer responsible for those payments. You also want to ensure that utility bills are transferred to the name of the person staying in the apartment. If you don’t do any of these things, it could cause damage to your credit in the long run if your partner fails to pay the bills or rent.
If you own a home together, you may decide to sell it and split the proceeds, or one partner may choose to buy out the other. This means that the person retaining the home will refinance it in their name only and pay a certain amount of equity (usually half the amount) to the person leaving the home.
Note: If one partner wants to buy the house but does not qualify for the mortgage on their own, you will need to sell the house and split the proceeds.
Dividing Shared Property
If each of you brought items such as furniture or dishes, the person who brought those items should keep them. If you bought items together, you both should sit down and divide the items.
If you are having trouble discussing this rationally, you may need to hire a mediator to facilitate. This process is similar to what will happen if you file for divorce. A mediator can help you come to an agreement and work towards fair solutions.
Dividing Shared Debts
If you have credit cards or car loans or other shared debts, you will need to divide them in the event of a separation. First, decide who will be responsible for each debt, then each person should refinance the debt in their own name so the other partner is no longer liable. If you cannot refinance the loan due to bad credit, the item associated with the debt should be sold, and the amount applied to the debt.
For example, if the car loan is in both your names and one partner cannot refinance it, the car should be sold to pay off the car loan. Credit card debts should be divided, and all joint accounts should be closed. Otherwise, you will be responsible if your partner defaults.
Starting Fresh
Finally, you will need to find a new place to live, secure a new security deposit, and perhaps purchase furniture and other necessary household items.
You also need to start planning your finances on your own again. This is a good time to set up a new budget that allows you to pay off debt and start working towards your financial goals.
The next time you start a new relationship, you may want to consider keeping your finances separate and working on a joint household budget until you marry. This will make any future separations easier to deal with.
Source: https://www.thebalancemoney.com/finances-and-breaking-off-relationships-2386013
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