Divorce
Unfortunately, divorce is a common cause of financial problems. And, of course, financial problems are a common cause of divorce.
An article in the WSJ describes efforts to decrease the cost of divorce in an economy that has affected all aspects of our lives.
The Current Economy and Divorce
How has the recent financial downturn affected the economics of divorce?
- The most valuable asset in many households is their home. With home values plummeting-how do you deal with it? In the old days-sell the home, pay off the note, and divide the proceeds. How can you do this, with many homes upside down, and with the sale of the home nearly impossible in this environment?
- The other most valuable asset, retirement and investment accounts. The value of many of those accounts has dropped by 30% by many measures.
- Debts in the marriage-how to decide who owes which debt, is increasingly complicated.
- Record high unemployment-how can you pay child support, when you are out of work.
- Attorney’s fees have increased faster than inflation, making divorce much more expensive-average divorce costs in the US-$ 15-20,000.00.
Divorce Alternatives
What are the alternatives in this heartbreaking scenario?
- Stay together-divorce rates typically drop, in an economic downturn-couples can’t afford to divorce-so they either stay together longer, or separate, but don’t file.
- Do-it yourself divorce-There are many do-it yourself divorce kits. The couple sits down with the templates, work out an agreement on all the issues, take it to court where it is filed. In some cases this can drop the cost to less than $1,000. The laws vary widely state to state-make sure you pay attention.
- Mediation-This article gives 10 reasons to use a divorce mediator-if do-it-yourself is not an option-as issues can’t be agreed upon-or things are too complex, this route may be worth exploring.
- Collaborative Divorce-This more formal route, involves attorneys, psychologists, and other professionals, coming up with a plan that both sides agree on.
- Divorce court-obviously the most expensive-this is the route chosen by those couples who basically now despise each other, and want to do the most damage possible. Usually the only winners here are the lawyers.
Divorce Precautions
What are a few precautions recommended by experts, especially if you are going to try to do-it-yourself?
- Don’t forget health insurance costs-many who have been used to employer provided plans-aren’t eligible once they divorce the spouse with the health plan-and even though Cobra laws insure you can get health insurance-the cost is prohibitive for some.
- Debts-make sure your name is not still on credit cards you are supposedly not required to pay, or that your name doesn’t remain on any other notes outstanding. If your ex doesn’t make the payments-the creditors will not care about the divorce papers-they will hound you for payment.
- Don’t make too many concessions-just because you want out. You will have bills to pay, kids to raise, and a significant cut in that family income you became accustomed.
- For many, a significant lifestyle adjustment is necessary-don’t live on credit cards cause you have “champagne” tastes, on your new “wine-cooler” income.
And finally the cheapest way to save money on divorce-is just like with many illnesses-PREVENTION!!!!
- Premarital counseling-remember lust does not last!
- Intra-marital counseling-don’t let small problems become huge ones.
- Financial stability-living beyond your families means will catch up-causing unnecessary stress.
- Keep love alive-spend quality time with each other. Date night, learning to compromise, and having a short memory for perceived slights will go far!
No amount of trying can keep all marriages intact. But before you break the tie that binds, make sure you check your emotions-and think clearly. And have a close friend, minister, or a family member support you along the way-to keep from doing something stupid!
Reader Questions
Have you been through a divorce?
How did it affect your finances?
Any tips for those who are beginning the process-things you did wrong, or right?
Help your fellow nurses and comment here.









