When we begin to think of divorce, two main aspects immediately come to mind, those being the emotional trauma and the financial distress which often follows. The irony here is worth mentioning: financial difficulties are one of the main reasons a couple seeks a divorce although the results of a divorce may have a much more profound effect on both parties which can far exceed any monetary problems they may have previously had. Let us take a look at a handful of the main expenses associated with divorce proceedings.
The initial cost depends largely on whether or not the divorce is contested. If both people cannot decide how to split various assets, fees can often run into the tens of thousands. Essentially, the more messy the proceedings are, the more money spent. While the so-called “do-it yourself” divorces may make sense for two people in agreement, it is best to hire a litigator should difficulties arise.
What Is An Asset?
An asset is defined as any personal property which has financial value to repay a debt. In the case of divorce, the “debt” can be though of as which party is owed what. Assets include bank accounts, properties, vehicles, stocks and bonds and everything in between. Unless a prenuptial agreement was signed beforehand, these assets will be appraised and divided accordingly. Depending on the situation, this division can come as a great loss to one party while another may vastly increase their financial position.
Should any children be involved, child support must be paid. These payments are determined on a graduated scale in regards to income. Once again, in a “no fault” divorce where both parties amicably split, any payments are conditional and not required as in the case of a contested divorce.
As assets are carefully examined during divorce proceedings, the division of a couple’s debt also takes place. This can be one of the most difficult parts of the whole process, as determining which debt is owed by which party can cause a great deal of tension. It is an unfortunate fact that during a messy divorce, people are prone to rack up a large debt simply to spite the other half. Should this debt issue not be resolved in a timely fashion the whole divorce will take considerably longer and therefore more costs will build up.
While the divorce proceedings, child support and debt and asset division may cost a great deal, let’s not forget what are called “start up” fees. These costs are the results of having to start over. They may include the down payment on a new residence, moving costs, child care costs, larger utility bills and others.
What Should I Do?
One of the best things to do should a divorce be looming on the horizon is to consult with a lawyer initially for an evaluation of what the overall costs may be. Monitor any credit cards and bank accounts to make certain that debt is not used as a weapon. Finally, both parties need to realise that the more they can find common ground, the less financial burden each will experience in both the short and long term.
This article was written in collaboration with Blanchards Law, specialists in family law.