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Divorce changes your financial life

Money is often a serious issue when it comes to divorce, and not just as far as splitting up the finances and property goes. What a lot of people do not realize - or are simply unprepared to handle when the time comes - is that when you get a divorce, your entire financial life changes.

If your spouse is the sole breadwinner, you know money will be a topic of serious conversation in a divorce. But we aren't just talking about situations in which only spouse has a salary. Divorce requires financial adjustments even in two-income households.

You cannot 'take them for all they are worth'

You don't get divorced because everything is going great. You get divorced because something is wrong, and this can leave you with some intense, negative emotions. Inherently, it is natural to want to "take them for all they are worth" if you have been cheated on or feel otherwise wronged.

In California, you cannot take it all simply because you feel as though the other spouse is at fault. Even if they are the one who cheated, each spouse is entitled to their half of the community property. That is, all property acquired during the marriage minus a few limited exceptions.

After property division, your financial situation will be different

The real problem comes in when you are trying to pick your lives up following the divorce. Inevitably, your income is going to drop - a LOT - in part because you will be maintaining a life and a household on your own instead of with two incomes. There's very little that you can do beyond bracing for impact.

First and foremost, you absolutely must take stock of what you own as well as anticipate what you will need to have covered post-divorce. If you do not, this could prove fatal to your finances. One of the easiest financial mistakes to make in a divorce is failing to properly consider the consequences of the "home decision."

Houses cost money to maintain, and not just in terms of the mortgage. You have to pay for electric, gas, water, garbage and maintenance. For most people, the home is the most valuable asset. Fighting to keep the home could leave you house-broke, because you won't get enough liquid assets in your share of the property division.

Assuming that you are on good terms or can negotiate good terms with your ex-spouse, one of the things you can do is work out an arrangement that helps avoid this result. Some couples will choose to sell their house and split the cost between them.

Others may work out an arrangement over the house that would allow one (or perhaps both) to continue to live there. For instance, one spouse could continue helping with their half of the mortgage. In this case, you have to seriously consider whether your spouse will do so. If you aren't on good terms, you could end up having to cover their half to avoid foreclosure or spending money to enforce the terms of the agreement in court.

One less common example - though increasingly so in these troubled economic times - is to have both people living in the house but with a different kind of relationship than before. This is another solution that doesn't work well when exes are not on good terms.

The good news is that if you select an attorney who understands both divorce and bankruptcy, he can help you avoid the mistakes that leave people in financial trouble. At the Law Offices of James V. Sansone, our attorney is highly experienced in both family law and bankruptcy.

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