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Five Tips on Handling Finances During a Divorce

Elgin IL Divorce Attorneys

Five Tips on Handling Finances During a Divorce A divorce can put a lot of stress on your finances. Lawyer and court fees, the costs of outside professionals like a real estate appraiser or a child custody evaluator, having to secure childcare during your meetings with lawyers and other professionals, and losses from the days at work you have to miss to attend these meetings and court appearances can quickly leave you facing a high divorce bill. Coupled with learning to live, save, and spend as a newly-single person, it is not uncommon for the expenses of divorce to leave an individual in debt.

Below are five guidelines to follow during your divorce to keep your costs low. You might even be able to avoid taking on debt entirely by following these tips. Like with anything else related to divorce, keeping your costs low is easiest if you and your spouse can work cooperatively.

Pay Off Your Debts Before You File for Divorce

Just like your marital assets, your debts will be divided between you and your spouse in your divorce. To keep this from happening, or at least lessen its impact, work with your spouse to pay off your outstanding debt before you file for divorce. This way, there will be less debt to split and you will both finish the divorce process with less debt weighing you down.

Another strategy to consider is to open two separate credit card accounts and transfer your shared debt to these. By doing this, you can split your credit card debt without having to involve the court.

Create a Budget

During your divorce, you will most likely face unexpected expenses. Create a monthly budget for yourself that allows you to save as much money as possible to cover these expenses. Take inventory of all of your spending and look for places where you can cut back, like your entertainment costs or your food costs.

Work with a Financial Advisor

If you have a financial advisor, discuss the divorce and its financial repercussions with him or her. Determine exactly where your assets are, what they are worth, and how they can be divided in your divorce. Certain assets may need to be divided through a Qualified Domestic Relations Order (QDRO) and no matter what your net worth, it is in your best interest to develop an asset division strategy before you begin the divorce process.

Consider the Tax Implications of Your Property Division Settlement

In Illinois, a divorcing couple’s marital assets are divided equitably. This means that they are not divided 50/50, but according to each partner’s personal needs. These personal needs include the financial impact of a division settlement, including the tax implications of each asset to be divided. If you are looking to retain your home in the divorce, think about the home’s property taxes – these will be completely your responsibility if you are the sole owner of the home. Go through the tax obligation of each asset in your marital estate with your financial advisor to determine how to fairly divide your assets and avoid saddling one partner with an overwhelming tax obligation.

Continue to Work with Your Spouse to Maintain your Credit Until the Divorce is Finalized

Strong feelings can make you want to avoid speaking with your former partner, but if you have joint utility bills and other expenses, you will need to continue to make these payments. Do not avoid making these payments out of spite – doing so will only hurt your credit and accrue debt. If your spouse is not being cooperative with your shared payments, make the payments yourself while keeping record of every payment you make. Present this record to your lawyer, who may use it alongside your other financial records to negotiate your divorce settlement.

Work with an Experienced St. Charles Family Law Firm

Managing your finances while you are working through your divorce can be stressful. If you are facing difficulties with handling your money or if you are unsure about how to approach a certain financial issue at hand in the divorce, speak with an experienced divorce lawyer who can give you legal advice and represent your case. Contact our team of experienced Elgin divorce lawyers at Pucci Pirtle, LLC today to schedule your legal consultation with a member of our firm.

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