You’ve been living with your boyfriend, sharing expenses, paying the rent or the mortgage together, splitting the groceries. But things didn’t go as planned, and you’ve decided to go your separate ways. You might think this will be a simple matter—at least where money is concerned—since you aren’t married. And it’s certainly true that splitting up when you aren’t married is a lot simpler than getting a divorce.
But you still have some serious financial questions to settle. Here are some questions you should ask yourself before you start packing up his (or your) belongings:
Are You Really Sure You Aren’t Married?
OK, we know it sounds like a silly question, but if you’ve lived together for a “significant” amount of time, have ever pretended to be married (such as using the same last name), and intended at one time to marry, then you may have met the criteria for common-law marriage in 14 states.
Whose Name Is On The Lease?
If you’re renting together, and both your names are on the lease, a breakup can create complications. If you’re the one leaving, the landlord can still legally hold you responsible for at least your half of the rent. On the other hand, if he’s leaving, but his name remains on the lease, he might retain the right to return to the apartment, which could be disconcerting to say the least.
The best solution—if you can get the landlord to agree—is to get the lease assigned to whichever of you is staying in the apartment. That way the lease will be only in the name of the person actually living in the apartment. Here’s a do-it-yourself lease assignment form. Once you determine who’s keeping the apartment, it makes sense for whoever’s leaving to receive his or her half of the security deposit.
Who Keeps The Mortgage?
Things get more complicated if you and your partner bought a home together, which many couples do because they need both incomes to qualify for a mortgage. When two people get a mortgage together, there is no way to remove one name from that mortgage. Your only option is to either refinance in just one of your names—if you can—or else sell the property. Unfortunately, that may be the only workable solution.
You may be tempted to leave the home in both your names, but this isn’t a great idea with a mortgage any more than it is with a rental lease. If you stay in the home, your ex will retain rights to the home even after he’s gone. And if you’re leaving, the bank could come after you for the mortgage if he fails to pay. Even if he does pay, the debt will stay on your credit report, making it harder for you to get a loan if you find another place you like. Here are some tips on refinancing a mortgage.
In addition to debt, you and your partner may have some equity in your home. If that’s the case, you’ll have to negotiate a fair division of that equity’s value to be paid by the person staying to the person leaving. (This is the kind of reason lawyers suggest that partners buying property together also sign an agreement or contract between themselves that will dictate how property is divided.)
Who Keeps The Credit Cards?
If you and your boyfriend shared credit cards, it’s probably a good idea to put an end to that arrangement for the same reasons you don’t want both names to remain on a lease or a mortgage: One of you could wind up on the hook for the other’s debt. Splitting up credit cards can be very easy or very hard depending on how you got them in the first place. If one of you is an “authorized user” on the other’s card, then all it should take is a phone call to the credit card company to get that user’s name off the account. If you’re the authorized user, you’re better off getting a credit card in your own name so you can build up your own credit.
On the other hand, if the two of you got the credit card as “co-applicants,” you may have no choice but to cancel it altogether—but you can only do that once the balance is paid off. (Here’s some more information about joint credit cards and breakups.) One solution might be to each get a separate credit card, transfer a portion of the balance to each, and then cancel the joint card.