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Protecting financial health during a divorce

On Behalf of | Aug 20, 2019 | Divorce |

When Maricopa County couples decide to end their marriage, finances are often a significant concern. Even when a couple is relatively financially stable, divorcing can create a shortfall that can be difficult to recover from. Many experts believe that careful planning before, during and after the divorce can minimize the negative impact that the end of a marriage can have on the financial health of both parties.

Each spouse should begin working on a post-divorce budget as soon as possible. This budget can help them to understand what they can expect financially, at least for the first year or two after the split. The budget should also reflect the cost of the divorce itself, including lawyer and court fees. In addition, divorces often involve one or both parties moving out of the couple’s home, so the cost of relocation, including moving services and security deposits, should be considered.

Another consideration is joint debt. While it is true that a divorce agreement may assign responsibility for a debt’s repayment to one party, creditors do not have to honor this agreement when attempting to collect money that they are owed. If the responsible party fails to make payments, the other may be pursued for the debt. Collection efforts may include reporting negative information on each party’s credit reports, which can make financial recovery more difficult.

The end of a marriage can have other consequences as well. If the couple has young children, custody and visitation will need to be addressed. In some cases a settlement agreement can be negotiated with the help of their respective family law attorneys.