The Financial Side of Divorce: How to Keep Your Costs From Skyrocketing

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No one goes into marriage assuming they’ll get divorced, but unfortunately, nearly half of all married couples find themselves facing divorce at some point in their lives. The divorce process can wreak havoc on your emotions and your finances, but if you can keep the following tips in mind, you will be able to pick up the pieces and move on to the next stage of life with your finances and emotional well-being still intact.

Keep Calm and Stay Level-Headed

The easiest way to rack up a huge divorce bill is by letting your emotions get the best of you. Feelings of revenge, sadness, and pain can lead people to make hasty decisions and create unnecessary court battles. In no-fault divorce states like Michigan, a couple’s entire portfolio of assets — both spouses’ individual assets and those they grew together — are split 50/50 unless a different agreement can be decided upon by both parties. It’s best to stay as calm as possible and accept the reality of the situation for what it is.

Consider Non-Traditional Legal Routes

Marriage is a legally binding contract. To absolve this contract, you must ensure you’re doing it within the constraints of the law. Otherwise, unexpected claims can be brought up against you down the line, or you could run into roadblocks when trying to purchase property on your own.

If your divorce is amicable, it is possible to get divorced without hiring attorneys. Sites like LegalZoom can provide you with all of the right paperwork necessary for a divorce. The site will even file the papers on your behalf for an additional fee. You are responsible for attending your court dates and managing the case on your own. It is by far the cheapest divorce route, but can leave you open to potential liabilities if the paperwork is not done correctly, or written with ambiguous language. If you and your soon-to-be ex can’t agree on how to split your assets or you have child custody to consider, you should consider hiring divorce attorneys.

An alternative to an attorney-less divorce is a one-attorney divorce. This type of divorce works well when both of the separating parties agree on exactly how they want to divide their assets. In this model, the attorney can’t legally represent either party. Instead, they focus solely on documenting your wishes and ensuring the paperwork is legal and binding. This is a great route to save money and have greater peace of mind knowing a professional attorney is handling the process for you. Unfortunately, this route also comes with its own set of risks.

The most common type of divorce is a two-attorney divorce. In this instance, both spouses have their own legal representation. This ensures that both parties have their legal rights maintained and have an attorney looking out for their best interests. Unfortunately, this is also the most expensive route.

When picking an attorney to represent you, make sure to ask about their retainer fee, hourly fee and what is included in each of those prices. Also ask if the same hourly fee applies to paralegal work, as much of the paperwork is done by a paralegal, which should come at a cheaper hourly rate.

Lastly, it’s important to remember that in a divorce, both spouses are entitled to equal representation. This is an important note for instances when one spouse doesn’t work or there is a large gap between the couple’s individual incomes. The spouse who makes more money could potentially be liable to pay all or a portion of the other spouse’s attorney fees equal to how much they are spending on their own attorney. This can cause your costs to balloon if you find yourself in this situation.

Make Rational Living Decisions

While going through divorce, often either you or your spouse will have the urge to move out of your shared home. Moving out may sound like a good idea on the surface, but it can have a big impact on your finances. Until your divorce is finalized, both spouses are still liable for all shared home expenses, even if one of you decides to move out. To avoid paying bills for two residences, it’s best to try to maintain a civil relationship with your spouse until your divorce is finalized. If you are able to stick it out at home, you’ll both save money and avoid potential legal liabilities in the long-run.

Keep Paying the Bills You have Been Paying

Another easy way to limit your divorce costs and liabilities is to maintain your financial status quo as best you can. While it may be tempting to stop paying certain bills or reimbursing your spouse for certain things you think they should now be paying, it’s not wise to change these habits. Not only does this maintain the integrity of the relationship between you and your spouse, it also shows good faith and eliminates any potential costs or liabilities your spouse could seek to recoup from you in court.

Divorce can be extremely expensive and is one of the most emotionally exhausting and stressful periods in someone’s life. However, if you can stay calm, keep a level head and focus on building a brighter future, you will make it through divorce and be more prepared to hit the ground running on the next chapter of your life.

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