Financial Implications of Divorce
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Navigating your way through a divorce can be an extremely stressful process. As well as working through feelings of being hurt, upset, or angry, you and your ex-spouse will have to make important decisions like who gets custody of the children and how to split up any shared finances or assets you have. Use this article as a guide to learn more about the financial implications of divorce—and how to complete the process as smoothly and as amicably as possible.
Common Costs of Divorce
Even before you start thinking of dividing up the finances, assets, and investments, you and your ex-spouse will have to pay a fee for filing a divorce petition form; in the UK, that fee is currently £340. At the end of the process, you will have to pay a fee for the decree absolute to be issued as well–£45. These two divorce costs are certain and unavoidable.
From there, however, the types of costs and fees you are likely to face depend on your unique situation. If you and your ex-spouse have kids, the subject of child maintenance payments must be addressed, while some spouses may seek additional spousal payments as well. Joint finances, property, and other assets must be divided up alone or with the help of the courts, and how much you will get from that division depends on a number of factors, such as your ages, earning abilities, living expenses, and standard of living.
Smart Financial Moves
Once you’re certain that divorce is in your future, it’s a wise idea to freeze any joint bank accounts you and your ex-spouse have together or use the money to pay off joint debts until the proceedings have been finalised. This way you can help ensure that the money is distributed in a fair way. Open up your own checking, savings, investment, and credit accounts to help rebuild your credit and get your finances back on track. It’s also a good idea to obtain a copy of your credit report from all three reporting ages so that you can ensure that no suspicious activity has taken place on your account. From there, becoming financially solvent depends upon setting a realistic monthly spending budget—and sticking to it!
Completing the Process
If you have an amicable relationship with your ex-spouse, the fastest—and cheapest—way to settle your divorce is to handle all of the proceeding yourself. You can use a maintenance payment calculator to figure out monthly child maintenance payments, and a divorce and separation calculator to divide up your finances and any assets you own. Allow your ex-spouse to pay the filing fee and serve you with the papers so that you won’t have to shell out your own money to get the process started.
Those who have a more tense relationship with their ex-spouses may look to divorce mediation in the form of a family member or an outside professional to help settle their divorce outside of courts and cut down on costs. They’ll help you work through disputes in a way that’s emotionally and financially beneficial for both parties. If no other avenue seems viable, enlist the help of an experienced solicitor who is knowledgeable in divorce law to help you reach a settlement. You can cut down on the solicitor’s billable hours by keeping a good record of your financial documents, offering to make copies yourself, and utilising your face-to-face and phone time wisely. Make sure you know which parts of the settlement are non-negotiable to you—maybe it’s custody of the kids, your current place of residence, etc.—but be flexible with the rest to help speed the divorce proceedings along.