When you’re getting a divorce, you not only have to think about the emotional pain you and your family are going to endure. While splitting up with your spouse is a tough decision and can take a huge toll on you and your children, you know that you also need to learn about how your financial situation could change following the divorce.
It’s your goal to have as smooth of a divorce process as possible, and you believe one of the ways you can do that is to research the financial aspect as much as you can prior to proceeding with any legal action. Then, you’ll know what your life may look like going forward and what steps you’ll need to take to support yourself and your children.
The following are the top three financial considerations you should keep in mind when getting a divorce.
1. The Division of Assets During a Divorce
Any high value assets that you and your spouse accumulated while you were still together will be factored into a divorce. This could be money in your savings account, investments, your home, properties you acquired, your cars, and other valuables that you own.
If you or your spouse had assets prior to your marriage, they could be separate from what’s included in the divorce. For instance, maybe you bought your own home prior to getting married and kept it to rent out to tenants, or your spouse inherited money from a relative before meeting you.
These would not be factored into the division of assets as long as you and your spouse kept them separate the entire time. For you, that means you didn’t put your money into a joint bank account or add your spouse to a deed. If they were involved at all, their attorney may come after you for those assets.
One way you can avoid any gray areas is a prenup. If you had a legitimate prenup agreement you and your spouse signed that explicitly stated which assets were yours, then you will be able to walk away with those assets in the divorce.
2. The Division of Debt
When you get divorced, the court will also separate your debt and decide who pays which debts as long as they were acquired during the marriage. The court tries to be as fair as possible with both the division of assets and debts. If you were awarded the vacation home, for instance, you may also have to pay more debts than your spouse.
The debts that may be included in the divorce decree are credit card debt, auto loan debt, medical debt, student loan debt, and mortgage debt.
If you purchased your home together, you could agree to sell it and then split the profits, or one of you could buy the other out if you wish to stay in the home. The latter may be the best scenario for the children, who may not cope well with losing their home, especially if they’re young.
3. Spousal Maintenance (Alimony) and Child Support Payments
During the divorce process in Texas, the court will decide whether one spouse has to pay the other alimony, also known as spousal maintenance, and/or child support. One spouse may have to pay the other hundreds or even thousands of dollars every month until the alimony ends and/or the child support ends.
If the spouse stops paying, they could be in contempt of court and face fines, penalties, wage garnishment, the loss of their driver’s license, and possible jail time. If alimony and child support payments become too costly because the spouse loses their job, they will need to keep paying as much as they can in the meantime while requesting a modification from the court due to a loss of income.
Paying for a Family Lawyer
When you’re ready to get a divorce, you also need to look at how much it’ll cost to hire a family lawyer. A family lawyer will require a retainer and possibly monthly payments. Divorces can take months or years if they are complicated, so the bills can add up fast.
You need to make sure you can afford your lawyer and that they’ll be willing to work with you financially. You may be tempted to represent yourself to save some money, but this will likely end up costing you way more in the long run because you are not an experienced family lawyer.
Protecting Yourself Financially in a Divorce
You may be facing a long and complicated journey, but there are steps you can take to protect yourself financially.
Make sure you go over any debts and assets you have in the marriage and find payment slips and receipts to show what you and your spouse purchased while you were together. You should do a free credit report on a site like Experian and look into your credit score and history. You’ll also be able to see an overview of your debts and your credit utilization ratio, which should be below 30% at all times.
It’s good to prepare yourself for life after your divorce by finding a more affordable place to live, getting a better-paying job, making a budget, saving up for your children’s education, your emergency fund, and your retirement, and purchasing a cheaper car if you need to.
Going from two incomes to one can be a rough adjustment, even if you have alimony and child support payments coming in. If you spent most of your time in the marriage caring for your spouse and children, you might want to consider going back to school to get an advanced degree so that you can earn a better living and provide for your family.
By knowing what’s to come, you can take the necessary precautions before your divorce is finalized and know that you’ll have an easier road ahead of you. Contact Boudreaux Hunter & Associates, LLC today at 713-333-4430 to schedule an appointment with one of our attorneys today.