Financial Matters to Consider When Divorcing
Divorce means a lot of changes for people’s lives. Making the decision to divorce and go through all of those changes is never easy. People need to consider many issues when thinking of divorce, not the least of which are the financial aspects that accompany it.
One of the major considerations for those thinking of divorce is what to do with the family home. The marital home is often one of the largest assets a couple has. However, when the real estate market bottomed out in 2008, many found themselves with underwater mortgages. Some of those couples considering divorce would lose money on their home if they tried to sell it and they would be dividing debt rather than equity in a property settlement. In some cases, people are unable to sell their homes because fewer people are buying. In other cases, it may be preferential to hang on to the home for the purposes of the children.
Some spouses may want to remain in the marital home, particularly if they have custody of children from the marriage, believing it will minimize the disruption from divorce on the children’s lives. However, a spouse needs to determine whether he or she can afford to remain in the home, considering the costs of the mortgage, utilities, maintenance and insurance. Many are unable to do so when living on only one income after divorce.
People also need to assess their debt levels when divorcing. Marital debt is often evenly divided between the spouses in divorce. People should consider whether they can afford to pay those debts, in addition to any debts they incurred prior to their marriages, such as student loans and auto loans. People need to factor repayment of these debts into the budgets they create for themselves when learning how to survive on one income, rather than two incomes as many people are accustomed.
Raising children can be expensive, and people need to consider the costs of being a single parent. Those who have custody of children end up taking care of daily incidental expenses and those expenditures can add up. Even when parents receive child support, they can still struggle financially. Those parents who do not obtain custody of their children must also factor child support payments into their post-divorce budgets.
Consult an Attorney
Divorce is a big decision, and people should be fully informed when they make it. If you have questions about divorce speak with a seasoned divorce attorney who can offer counsel about your options.