Separation or divorce - how to sort out the finances in a breakup
Breakups are never easy. Alongside the emotional toll, there's often a complex tangle of shared finances, bills, and assets to sort out. Separating your financial lives can feel overwhelming, whether you were in a de facto relationship or married. But with some structure and support, you can move forward with confidence and control. Check out these practical steps to help you get on top of your finances after a relationship breakdown.
1. Take stock of your current financial position
Before you make any big decisions, it's essential to understand where you stand financially. Begin by gathering and reviewing the following:
- Bank statements (joint and individual accounts)
- Credit cards and loans
- Utility and subscription bills
- Mortgage or rental agreements
- Superannuation balances
- Insurance policies
- Assets and liabilities (property, vehicles, debts, investments)
Create a list of joint assets and liabilities, noting which are shared and in your name alone. This list will give you a clear picture of what must be addressed.
2. Separate your bank accounts
If you have joint bank accounts, consider setting up your account as soon as possible. Update your employer with your new banking details and redirect any incoming funds into your account.
You and your former partner may need to agree on managing the joint account in the short term, especially if there are automatic payments or joint bills. Sometimes, it may be best to freeze the account until a financial agreement is reached.
3. Sort out the bills and day-to-day expenses
Review your shared bills and subscriptions. These may include:
- Rent or mortgage payments
- Electricity, gas, and water
- Internet and phone plans
- Streaming services and apps
- Groceries and household expenses
Decide who will pay what in the short term while matters are sorted. It is advisable to document this to avoid misunderstandings. If you are moving out (or your partner is), contact service providers to update the account holders and billing details. Don't forget to check whose name is on the lease or mortgage, and ensure that arrangements are updated as necessary.
4. Review debts and joint loans
Joint debts don't disappear after a breakup. You're still legally responsible if your name is on a loan, credit card, or finance agreement - even if your ex agrees to pay it. It may be helpful to follow these steps:
- Speak with your lender about your options
- Refinance the loan in one person's name (if agreed)
- Cancel unused credit cards or lines of credit
It's critical to stay on top of repayments during this time to avoid credit score damage or default notices.
5. Update Centrelink, Medicare, and other government agencies
If you receive family payments or other Centrelink support, you must inform Services Australia of any changes to your relationship within 14 days, as this may affect your:
- Parenting Payment
- Family Tax Benefit
- Child Support assessments
- Rent Assistance
Also, update your relationship status with:
- Medicare (you can leave a family account or create your own)
- MyGov
- ATO (for any shared business or tax matters)
6. Consider a binding financial agreement or consent orders
If you and your ex can agree on dividing assets and debts, you may choose to formalise it through a Binding Financial Agreement (BFA) or Consent Order. These can protect both parties, provide legal certainty, and help avoid costly court disputes.
It's always best to get independent legal advice, especially if property, superannuation, or children are involved. You can seek help from a family lawyer or use government resources like the Family Court website.
7. Get support and don't go it alone
Breakups are a huge life change, so asking for help is okay. Depending on your situation, you may benefit from:
- A financial counsellor - for budgeting, debt advice and financial stress
- A family lawyer - to understand your legal rights and responsibilities
- Mental health support - from professionals, friends or support groups
- Mediation services - to help work through disagreements
You can also contact free services like Relationships Australia (1300 364 277) for support during separation.
8. Start fresh by building a new budget and plan
Once the dust has settled, focus on rebuilding. Create a budget based on your new income and living expenses such as rent or mortgage, childcare or school costs, transport, utilities, groceries and other essentials. If possible, start putting aside savings, even small amounts. Regaining financial independence can be empowering and help you move forward with peace of mind.
Final Thoughts
Sorting out your finances after a breakup can be confronting, but it's also an opportunity to take control of your future. Take it step by step, seek support, and give yourself time to adjust. You can build a strong financial and emotional foundation for your next chapter with the right actions and mindset.
We understand that breakups can be a tremendous emotional and financial strain. While we cannot assist with the emotional aspect, we're always here to help if you need financial assistance. Check out our cash loans of up to $5,000 to learn how quick and easy it is to borrow extra funds. Once a loan is approved, the cash is typically in your bank account within a few hours, providing some breathing space from all the financial pressures.