Divorce can quite often be an enormous financial burden for both spouses. It can be a very financially trying time when spouses have to divide households and divide expenses. Going from a double income household to a single income household can really stretch resources. There are some common financial mistakes that divorcing couples will often commit that you should be careful to avoid.
First is to remember that your resources have probably shrunk significantly, and you will probably have to make adjustments and some sacrifices. To that end, a common mistake is to not face this head on and make a new budget. Sitting down and putting pen to paper will help you really see exactly what you are working with and where you can make cuts. If you fail to understand your budget and make the necessary changes, you could end up in serious debt.
Another serious mistake can be settling before you have a complete understanding of all of the marital assets and debts. In New Jersey, all marital assets and debts are subject to an equitable division. If you have an agreement to divide assets and debts before you have a complete picture of all of the marital estate, you could be giving up a disproportionate share of the assets or taking on too much debt. A related issue is that not everyone understands that an equitable division does not always mean equal. There are some situations in which a marital estate would not be totally equally divided. Moreover, it is not necessary to literally sell every asset and split the proceeds. Couples can lose a lot of money this way. Instead, it makes more sense to make sure the value of the assets each party receives is approximately equal.
Another common mistake is to put off the divorce or talking to a divorce attorney because of concern about how the divorce will end. Waiting to divorce for the sole purpose of wishing to avoid an unfavorable result will not help. The longer you stay married, the more assets you accumulate will still be marital property and debt accumulated by you and your spouse will be marital debt. This means that your spouse will be entitled to his or her equitable share of the assets you are continuing to accumulate and you will also be on the hook for your equitable share of the debt that continues to accumulate. It is a better financial decision to proceed with the divorce and sooner rather than later to prevent this.Staring a divorce on the right financial foot is crucial to helping rebuild your future. Contact us today at (732) 529-6937 to talk about your divorce and your future.