It can be emotionally difficult to consider getting a divorce. The following steps can be even harder during a weak economy or if you are facing an unstable financial situation.
Can you or your partner afford support payments?
If you or your partner have lost a job and cannot afford spousal or child support payments, divorce might be out of the question. Leslie Tain, founder of Tain Law Office in New York, told The Balance in an email, “Sometimes it may benefit one party to divorce while not working to reduce or limit exposure to some costs, such as lowering child financial support obligations.” If you are the person with reduced income but do not expect to be the custodial parent, you may want to try discussing a reduction in support payments with your partner. “See if the matter can be resolved informally without litigation,” Tain said. “It may help to contact the support recipient first to see if they are willing to agree to a reduction.”
Has the value of the business decreased?
Divorce can significantly impact a business, especially if both parties are working and involved in the business. Unless you have a prenuptial or postnuptial agreement that protects your business, you and your partner will likely have to figure out how to divide the business. Tain said that every divorce case is unique when it comes to business ownership, state laws, types of business, and the relationship. The case will also be affected by whether one spouse owns a business or if both spouses own the business equally. These relationships can significantly affect the outcome of the divorce and subsequent payments. If possible, you might want to secure a prenuptial agreement to protect your business from such issues later. “Prenuptial agreements are the least expensive, quickest, and easiest way to protect your small business in the event of a divorce,” Tain said. “You can also consider postnuptial agreements or other contracts that can be referenced in case of divorce.” Since they are written contracts, prenuptial and postnuptial agreements can remove much of the ambiguity from business ownership settlements. But if you do not have one, consider that a weak economy might mean that the company’s value has also decreased. If one spouse needs to sell their business, they may not receive as much as they would if the economy were thriving.
Is your house underwater?
If you and your partner are divorcing and selling your home, the housing market ultimately matters to you. “Changes in housing markets and employment may influence some couples’ decisions to divorce due to financial instability, making it difficult to sell their home and divide assets or support two homes,” Tain said. “If you are divorcing and own a home with your ex-partner, have discussions with them about your real estate goals.” Your goals will dictate what you can do in the short and long term. For example, if your home is worth less than it was when you bought it, which is known as your mortgage being “underwater,” you might consider holding onto it until your home’s value rises. However, if you or your partner leave the home, you are more likely to deal with two mortgage payments, which may not be sustainable if you are already facing financial difficulties. You might also consider continuing to live with your partner post-divorce until you are ready to put the house on the market. There are many options—the right choice depends on your needs and what you feel comfortable with. “You might consider contacting a real estate agent for input who can be neutral and provide you with fair and honest answers, especially one who has experience selling real estate for divorced couples,” Tain said. “While no one wants to leave money on the table, some couples want to separate as quickly as possible post-divorce and do not want to wait for their share of the home’s selling price.”
Are you…
Can you afford a divorce lawyer?
The cost of obtaining reliable and responsible legal representation is not cheap. Paying nearly 70% of people who hired a divorce lawyer an attorney at least $200 per hour, and the average cost of legal fees for divorce where lawyers handle everything is $11,300, according to a survey conducted by Nolo.com in 2019. Although divorce costs are often high, there are many low-cost and sometimes free resources – if you qualify. Contact your county legal aid association to see if a free lawyer can work for you, or if they can refer you to another organization that can help you. “You may be able to get a lawyer appointed by the court if custody [or] visitation issues are included in your divorce and you have really limited means,” said Thyne. If you cannot get a lawyer court-appointed and you qualify for spousal support after divorce, you can file a request with the court and have your partner cover any reasonable legal costs.
Is it worth doing it yourself?
For some couples with limited assets and no children, you might not need to go through a stressful divorce process. In fact, you may be able to complete everything online. There are courts that provide uncontested divorce programs on their websites. Remember, unless you can demonstrate that you have financial difficulties, you will need to pay the applicable court filing fees. Each state has its own requirements to qualify for an uncontested divorce. Before applying, be sure that you qualify in your state and understand the relevant fees.
Frequently Asked Questions
Is divorce financially feasible? While divorce costs a lot of money, and it is usually more expensive to live alone, there are financial benefits to divorce. You will have full control over your own financial decisions, including how much you want to save and where you want to invest your money. If you and your partner have similar incomes, you may actually pay less in taxes depending on the state you live in. If there is only one custodial parent, you may be able to obtain more money in financial aid for college, as the custodial parent only has to provide their financial information.
How do people manage to afford living after divorce? While your costs may rise and you won’t have a secondary income to rely on, there are some ways to meet your needs. First, you want a realistic picture of the amount of money you will have each month, including any money you will receive from your partner. Then you want to budget based on that, focusing on ensuring you can meet all your own and your child’s needs if you have one. If you are still in the middle of the divorce process, make sure you and your lawyer have accounted for all assets, including retirement assets and businesses, so that everything is distributed fairly.
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Sources: The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts found in our articles. Read our editorial process to learn more about how we fact-check and maintain the accuracy, reliability, and quality of our content.
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The enumeration. “Receiving regular child support: 2017.” Nolo.com. “How much will divorce cost me and how long will it take?” Arnold Smith Law. “Can I make my husband pay attorney fees in our divorce?” Family Law PLM. “The financial benefits of divorce.”
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