Preparing for the changes that stem from divorce
Couples going through divorce need to be aware of their financial situation that will arise after the marriage has ended.
May 21, 2013
Preparing for the changes that stem from divorceArticle provided by Gillespie, Shields & Durrant
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The first steps toward filing for divorce can be extremely emotional for any person. Often, this decision is made only after the couple tries many different things in an effort to get the relationship to work. The couple may not be aware that their marriage is broken, and this can lead to both sides being unprepared for the changes that will come in the future.
Once the divorceis filed, even couples with a high net worth will see a significant change to their financial situation. As part of the property division phase of the divorce, the couple will begin dividing their assets and debts accumulated during the marriage, including mortgage debt, credit card bills as well as assets such as retirement accounts or any equity in the marital home.
When dividing the debts, the spouses need to be sure that they carefully consider their ability to repay these obligations post-divorce. This can be a very complicated process, and may lead the spouses to make decisions that are not in their best interests. If the spouse is not careful, he or she may experience financial problems that could lead to bankruptcy, because of the changes to that individual's standard of living.
In many households, each spouse will be earning income that is contributing toward the needs of the family. The strain of the divorce proceedings will often make it too difficult for both parties to stay under the same roof together while the process is ongoing. Each spouse will need to determine how much they will be able to afford when finding a new place to live.
Spousal and child support may be included as part of the divorce agreement, especially if one spouse spent considerable time at home raising the child. These payments need to be considered when making a post-divorce budget, for both the individual paying the support and the person receiving it. There are tax consequences that go along with these payments, and couples need to consider the impact that this will have when trying to decide a property division agreement.
Do not let a divorce ruin your finances. You need to understand the impact that a divorce will have on your family's future. Some people make the mistake of agreeing to all of their soon-to-be ex-spouse's demands, just to get the divorce over as soon as possible, never realizing the harm that they are causing.
Once a divorce is final, it can be difficult to change any of the court's orders absent special circumstances. You need to be prepared for the process, and be ready for the changes that will be coming. Speak to an experienced family law attorney to learn how to protect your interests during your divorce.