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Dealing with financial challenges in a divorce

On Behalf of | Aug 14, 2019 | Divorce |

For some Illinois couples, a divorce can mean financial problems. However, there may be ways to mitigate some of those issues. Making a budget can help a person understand what short-term expenses may be ahead, including finding housing, getting new insurance and purchasing a new vehicle. People should also estimate what the divorce will cost.

Asset division can be a complicated process. People may want to consider the liquidity of certain assets and which ones have tax obligations. Some people might want to keep the home, but it may be too large and too expensive for this to be practical. The couple should try to pay off debt before the divorce is final if possible. If they cannot do this, they should address how the debt will be dealt with in the divorce agreement. They might also want to make a plan for their children’s college education.

Planning for contingencies is a good idea as well. For example, if one person is getting support from an ex-spouse, insurance could offer protection if the ex-spouse dies or becomes disabled. Another step after the divorce may be revising the estate plan and removing the ex-spouse as an authorized user on accounts.

Many couples may prefer trying to negotiate an agreement instead of going to litigation. Negotiation can be less stressful and expensive, and it gives the couple more control over the final agreement. Even in high-conflict divorces, mediation may help couples come to an agreement. While litigation is an adversarial process, the focus in mediation is reaching a resolution that satisfies both parties.