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Financial Mistakes to Avoid When You Divorce

websitebuilder • Oct 30, 2018

A divorce is a stressful and tenuous time. You have to make many decisions as you move through the process, and you need to consider each decision carefully. Financial decisions are especially important, as they will have an impact on you and your family long after your divorce is final. If you rush through the decision-making process, you stand to make some crucial errors.

The following are some financial errors to avoid during your divorce.

Failing to Consider the Long-Term Impact

When going through a divorce, many people are inclined to get the process over with as soon as possible. When you rush through the financial components of a divorce, you risk making some critical mistakes regarding the settlement. You may initially believe that the settlement is fair, but it could have some long-term impacts.

For example, you may believe that getting the house in your divorce is a fair trade for an asset of equal value. What you may not think about is the additional costs associated with the home and how they can impact your finances. In a heightened emotional state, these important considerations may escape you until it is too late.

If you do not carefully evaluate how the divorce will impact you financially in the future, you could end up with liabilities which will negatively affect your quality of life.

Not Taking Marital Debt Into Account

When you and your spouse divorce, the debt accumulated during the marriage does not simply disappear. You have to divide the debt just as you divide the assets. Despite which person is responsible for it, the creditors come after both spouses for shared debt.

Issues primarily occur when one person does not pay his or her obligations. If one of you does not pay your credit balance, both of you could suffer an impact to your credit score.

Not Insuring Child Support or Alimony Payments

If you expect to receive child support or alimony payments after divorce, you should consider trying to insure those payments. You can ask your former spouse to be to obtain an insurance policy to protect your payments in the event that your spouse can no longer pay them because of disability or death.

A life insurance and disability policy will protect you and ensure that you still receive the payments whether or not your former spouse can pay. If your spouse is unwilling to take out the insurance, alternative property as debt distribution can provide greater future financial security.

Hiding Your Assets

Another major mistake is attempting to hide assets from your spouse with the hopes of retaining them for yourself. Keep in mind that divorce attorneys are experts at finding hidden assets and will even contract with forensic accounts to thoroughly comb through all financial records if they suspect that you are hiding assets. This is helpful to you if your spouse is hiding assets but will result in negative consequences for you if you are the one hiding assets.

You also should know that hiding your assets will destroy your credibility in court. This leaves your spouse with the upper hand with the judge. Always declare your assets in court to ensure that everything is fair.

When you get a divorce, you need the best representation possible. We at the Hart Law Offices, P.C., have over 40 years of experience and primarily focus on divorce and family law matters. If you need help with filing a divorce or another family law issue, please feel free to contact us for a consultation. We look forward to helping you.

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