A wedding may be a one-time large expense (unless you're a chronic bride or groom!); with a divorce, you could be looking at paying through your lifetime or face complete financial ruin, from which it may be very difficult to recover. This is true of either spouse, but generally one hears more about the wife being left high-and-dry, especially if she is a stay-at-home wife and mother. Irrespective of gender, this article provides some life-saving guidelines on how to avoid financial ruin after a divorce.
A word to the wise, the article is meant to provide information of a general nature on the subject and is not meant to be taken as legal and/or financial advice - that is left to qualified experts!
- Prepare a pre-nuptial agreement: While it may be difficult to think of mundane matters such as money, when you are in the throes of pre-wedding bliss, "forewarned is forearmed"! In a situation where both parties are working or have individual and separate assets and resources prior to the marriage, making a pre-nuptial agreement is only common sense! The agreement will help list clearly the separate assets of each party and how these are exceptions to common property or "no-fault" divorce laws pertaining to income and assets accumulated during a marriage, based on the state you reside in.
- Be aware of your rights and obligations: In a situation where divorce becomes inevitable, each party must know and understand their individual and combined rights and duties under existing applicable laws.
- Where the divorce is by mutual consent, both parties along with their respective attorneys should sit down and discuss how join assets and liabilities will be shared or handled. Conversely, in the case where the divorce is ‘hostile' and one party tries to take unfair advantage of the other or liquidates his/her assets with a malicious intent, take care to cancel joint bank accounts or credit cards to prevent misuse; document financial obligations or liabilities which you were not originally liable for and keep such creditors informed about the divorce proceedings.
- Plan ahead: Divorce doesn't occur overnight and you will usually have quite a bit of time, in which you can assess your current financial position and prepare a plan to have a life beyond the divorce. Take stock of your existing resources - income from a job or own business, savings, etc, - and estimate the finances you'll need to resume your life as a ‘single'. This should include basic necessities, child support and living expenses to have a reasonable comfortable life.
The information provided in this article should hopefully provide you with a basic idea of how you can avoid financial ruin after a divorce in an emotionally-uncomfortable phase in your life.