During the process of divorce, a partner who was not in charge of the family finances can receive some unwelcome economic surprises. According to the Texas Vital Statistics Unit, the rate of divorce has increased from 3.3 per 1,000 residents in 2005 to 3.4 per 1,000 in 2006. Nationwide statistics reflect a similar upswing.
Sometimes a marriage partner wants a divorce over with so fast that he or she will settle for far less than what could have been his or hers. Imagine learning after a divorce is settled that your partner put up the house for collateral on a debt you did not know existed. Here is how to protect your finances.
Create your own budget. Newly divorced men and women can have trouble managing their finances, so sticking to a sensible budget is necessary after divorce.
Get a lawyer. People who take complicated matters, like divorce, into their own hands regret being their own attorney. Try the mediation process to settle asset division, but keep an attorney ready to help sustain what is yours.
Do not spend your settlement all in one place. It may be tempting to spend a large sum of settlement cash, but look to the future before going on a spending spree.
If your debt is far greater than your soon-to-be-ex’s debt load, a judge may award you more assets. Conversely, you might have to help pay off debts that you and the ex owed jointly. Prepare yourself for these possibilities.
Should you want to keep the family home, have it appraised and run a title search on it immediately. Any liens against the property will come to light, and you will know if the house was pledged as collateral.
Source: foxbusiness.com, “Six money tips for late-in-life divorces,” Erica Sandberg, Oct. 31, 2011