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Navigating Divorce Amidst Financial Challenges

In the United States, money troubles and disputes related to finances top the list as the leading causes of divorce. When spouses find themselves at odds over financial matters, it can be a harbinger of doom for their marriage. This is due to two primary reasons.

Firstly, being out of sync with your spouse on financial matters can reveal underlying issues in your communication and collaboration skills, extending beyond just money-related problems. Chances are, if you can engage in constructive conversations about money, you are also more likely to effectively communicate about your children and other crucial aspects of your marriage. In this context, discussing finances often serves as an early warning system for the overall health of your marriage.

Second, financial discord can be a foreboding sign for your marriage lies in the sheer practicality of what you’re fighting about. If money is a constant concern for your family, it means that fundamental aspects of life – such as food, shelter, clothing, and your children’s education – may not be receiving the attention they deserve. If discussing money is challenging during prosperous economic times, imagine the strain it would put on your marriage during less favorable circumstances.

Handling Divorce When Finances Are a Concern

As previously mentioned, financial stress and anxiety are primary triggers for divorce in the United States. Most married individuals endure a great deal of hardship before making the emotionally and financially taxing decision to proceed with a divorce.

The best divorce attorney would counsel clients that when a marriage’s liabilities begin to outweigh its benefits, it’s time to consider divorce. However, it’s worth noting that very few people rush into divorce for trivial reasons; rather, it’s often the culmination of long-standing marital problems.

If money is the root cause of your marital issues, a significant change in income, such as job loss or reduced earnings, may prompt you or your spouse to contemplate divorce. It’s crucial to carefully assess the situation and formulate a plan before taking any steps toward divorce.

Conduct an Honest Financial Assessment

Start by evaluating your current financial situation. What is the value of your home? Have you been actively saving for retirement? Can you list all your credit cards and the associated debts on each?

This assessment will help you understand your options during and after the divorce process. Will you have enough savings to secure new living arrangements, or is moving in temporarily with family a more realistic option? These are the critical questions to address before embarking on a divorce journey. It’s advisable to have a problem-solving session with the best divorce attorney you can hire to explore your best course of action.

Assess Home Equity

Consider the equity in your home. If the home were to be sold or one spouse bought out of it, would there be equity, or would you owe more on the mortgage than the property’s market value? If both spouses’ names are on the mortgage, refinancing may be necessary to release the departing spouse from future mortgage obligations. However, getting approved for a refinance, especially during economic downturns, can be challenging.

Evaluate Investment Holdings

Financial challenges during tough economic times can impact not only your income and savings but also your investments. The nature of your investments will influence how settlement negotiations unfold. Investments that are less dependent on stock market fluctuations, such as pensions, tend to remain more stable during economic downturns.