Divorce and Your Finances

While it’s often a healthy and necessary choice, divorce can cause some degree of emotional pain. This pain is often heightened by the financial uncertainty that comes with divorce.

Some of the most common questions divorce attorneys address relate to divorce and your finances. Concerns about dividing property, paying off debts, and protecting retirement accounts often dominate the conversation.

After a little research, many people realize that divorce doesn’t have to break the bank. Taking several important steps before and during your divorce can help ensure that you protect your finances during the separation process.

 

Common Financial Challenges in a Divorce

There are some large financial concerns that seem to appear in most divorces. Listed below are a few key issues that you may want to address when you consult with a local divorce lawyer:

  • Splitting up assets. In the course of a marriage, a couple may acquire several kinds of joint property. Your car, home, furniture, and other assets may all be held jointly. When a court divides a couple’s assets, it often considers the earning potential of each spouse and the length of the marriage.
  • Dividing debt. Each state handles debt differently. In community property states, each spouse is responsible for half of the jointly held debt and potentially half of the other spouse’s individual debt. Other states do not require one spouse to be held accountable for the other’s personal debt.
  • Retirement savings. Depending on your state’s laws, you may have to give up a large chunk of your retirement savings in a divorce. The longer the marriage, the greater this amount may be.

While these three areas pose financial challenges in a divorce, they are as common as divorce itself. As a result, there are many different strategies you may take to protect your finances in a divorce.

For more information on the divorce laws in your area, contact a local divorce lawyer today.

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