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Divorcing? Get Your Finances in Line!

Posted By Cairns Law Offices || 13-Dec-2016

Researchers estimate that 45 to 50% of first marriages end in divorce in the United States. For second and subsequent marriages, the divorce rate is even higher. You may ask, “Why is the divorce rate so high in the United States?”

Many experts and divorce attorneys agree that two factors play a key role in the rate of divorce: 1) women are more economically independent than ever before, and 2) divorce is socially acceptable in the 21st century.

Even though more of America’s women are college educated and financially independent than they were in the 1970s and earlier, that doesn’t change the fact that a lot of spouses (men and women) put off a divorce for financial reasons and financial reasons alone. Many of our clients cited these economic reasons for putting off their divorce:

  • Afraid of losing their hard-earned assets
  • Afraid they can’t afford to pay child and/or spousal support
  • Afraid of giving half of their retirement to their spouse
  • Afraid of losing the marital residence
  • Afraid they can’t afford to support themselves or their family (often, stay at home moms) without their spouse’s income
  • Afraid of having to go back to work after a long hiatus
  • Don’t want to pay spousal support
  • Afraid they’ll be broke if they get a divorce
  • Afraid of being stuck with all of the marital debt

If you notice, we used the word “afraid” a lot. That’s because too many unhappy spouses put off filing for divorce because they have a lot of fear about what will happen to them financially. Most of these fears come from the unknown and not knowing much about how divorce will affect one’s finances.

Have money fears prevented you from taking the plunge?

If you’re in an unsatisfying marriage but you’ve held on because you’re afraid of ending up penniless, we have good news for you. Pennsylvania’s divorce laws are aimed at being fair. If you can’t afford to pay spousal support, there’s a good chance the judge will not order it.

If you’ve only been married for a year or two and you’re wealthy, the judge isn’t going to divide all of your assets down the middle and give the other half to your spouse; it doesn’t work like that.

Instead, the judge will look at only the assets acquired during the marriage, and after carefully reviewing your situation, the judge will decide on a fair and equitable distribution, unless of course you and your spouse reach an agreement on your own.

If you’re headed for divorce, here are some things to start thinking about today to prepare yourself financially:

  • If you’re the lower-earning spouse, you cannot rely on spousal support because it’s not guaranteed. Start thinking about what you need to do to become financially independent and self-supporting.
  • If you’re the higher-earning spouse, start thinking about ways to increase your income. If you’re ordered to pay child and/or spousal support, you’ll probably need more income to be comfortable.
  • Focus on paying off debt and living below your means.
  • Create a post-divorce budget today.
  • Think, “What can I do to become more successful?” If going back to school or working hard for a promotion will help you out, then by all means do it.
  • Find ways to cut down on your expenses.
  • If you’re not already, start saving 10% of your income so you have a safety net.
  • If you can afford one, hire a financial advisor to help you plan for retirement as a single person.
  • Ask your divorce attorney for advice on how to protect your credit during a divorce.
  • If you’re in the dark about your finances, now is the time to get intimately familiar with them.

Divorce does not have to be the big financial blow that people fear it will be. While you’ll need to reorganize your life and your priorities, if you play your cards right, you can change your economic circumstances for the better.

One of the best ways to get started on the right foot is to agree to a mutual consent, no-fault divorce through Cairns Law Offices. With our services, it’s possible to achieve a fast and cheap divorce in no time at all. To learn more about our low-cost divorce services, contact our office directly!