3 Financial Problems That Can Come Up During A Divorce
It is hard enough to go through a divorce due to the emotional toll it takes on you to end a marriage. However, you must pay attention to the financial problems that can result from divorce as well. Here are 3 potential problems you may run into.
Not Creating A Budget
There will be big changes coming in terms of your finances. While you may be receiving alimony, you shouldn't be counting on receiving it. Come up with a financial budget that will reflect your new living situation on a single income.
You will need to account for paying rent or a mortgage on your own, utilities, food, and any other monthly costs you incur. It can be dangerous to continue living your life just like you did before the divorce, especially if the money isn't there to pay for it.
Wanting To Keep Your Home
You may have emotional attachments to your current home and be looking to keep it after the divorce. One thing to keep in mind is that your old home may not be affordable when it is just you living in it. In addition to needing to buy your spouse's portion of the home that they have paid into, you'll still be responsible for property taxes and the remainder of the mortgage.
Sometime you just need to realize that it is time to downsize. Sell the home and split the profits with your spouse rather than try to keep it.
Not Settling Debt
You and your spouse may have individual and shared debts that need to be settled during divorce proceedings. Are they debts that both of you will pay off together, or debts that one person will take full responsibility for paying? Be sure that you've settled all of your debts during divorce proceedings, and realize the consequences of those debts not being paid off.
For instance, you may have had a joint credit card with your spouse that was rarely used, but the credit card debt will be viewed as both of your debt. If your soon-to-be former spouse says that they will be responsible for the debt, you may still be responsible if they fall behind on their payments. Don't let this surprise come back to haunt you down the road.
These are just a few mistakes that can be made about your finances during divorce proceedings. Your lawyer can help you avoid these mistakes and any others that could be made.