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IL divorce lawyerOne of the most challenging aspects of divorce is the need to divide assets and debts that a couple has accumulated during a marriage. A divorcee’s long-term financial stability can feel threatened by this process, as a typical divorce leaves both partners with less in asset ownership and cash savings than they had before the divorce. Naturally, this can have implications for retirement.

Those interested in getting divorced can rest easy, however, knowing that certain things are not changed by divorce. One of these is Social Security benefits, a major piece of one’s overall financial picture. Understanding what your benefits are likely to be can help you plan for the future and engage in wise financial negotiations.

Can My Former Spouse Draw On My Benefits?

If you have made substantially more money than your spouse throughout your marriage, you may be wondering whether your spouse can get their own benefits based on yours - and, more importantly, whether that will reduce the amount of benefits available to you. Whether your spouse can benefit from your work history will depend on a number of factors, but the most important thing to know is that, no matter what your spouse does, your personal benefits will not change. You cannot do anything to deny your spouse benefitting from your Social Security contributions, but their actions will not impact your benefits in any way.

St. Charles IL divorce attorneyWhen going through a divorce, you may not have future consequences at the top of your list of priorities. Many people either forget about the long-term consequences of divorce or ignore them. Either way, not considering the long-term impact of your decisions can cause more stress in the long run. The downfall for many people going through a divorce occurs during the asset division process. You may be focused on your assets and fighting to get what you believe you deserve in the moment, but it is also necessary to understand the long-term effects of your decisions, including the implications for your taxes after divorce.

Things to Keep in Mind About Taxes During Divorce

When it comes to dividing your property and debts, taxes should also be a part of the equation. Even if tax issues are not an immediate concern, they can impact your overall financial health in the long run. When you go through the asset division process, here are a few things you should take into consideration concerning your tax situation:

  • Your tax filing status will likely change. Most married couples file joint tax returns, but once you are divorced, you will no longer be “married filing jointly,” but rather, “single.” This can change the amount of tax that you owe come tax time, depending on your income.

Kane County divorce lawyerYour marital status does not directly affect your credit score. However, that does not mean that it cannot affect it indirectly. It is not uncommon for a person to notice a difference in their credit score during and after a divorce because of all of the financial changes that this process brings. Having a decent credit score is important for a variety of reasons. Your credit score is how lenders determine whether or not they will do business with you. If your credit score takes a hit, you could have difficulty purchasing a vehicle or home, renting a place to live, or opening any other type of line of credit. Protecting your credit score should be a priority at any time, but especially during your divorce.

Steps to Take to Protect Your Credit

If you are planning to file for divorce, it is important that you pay attention to your finances. Your entire life is changing, and it is easy for something to slip through the cracks and harm your credit score. Here are a few things you can do to help protect your credit score during your divorce:

  • Obtain a copy of your credit report. First, you should order copies of your credit report from all three credit-reporting bureaus. This will allow you to see exactly which accounts are linked to your credit file. Make note of all of the joint accounts that you and your spouse have. Look for any discrepancies on your credit report, such as incorrect, incomplete, or missing information.

Kane County divorce lawyerdivorce can be a stressful and contentious matter, and not just because of the impending end of the relationship. Financial matters are also particularly important in divorce, and they can have a lasting effect on each party’s quality of life. If you are planning on filing for divorce or have recently been served, beware of these money issues in your case and learn how an experienced divorce lawyer may be able to help protect your interests and financial future.

Housing and Living Expenses

When couples split, one typically leaves the family home. The other might stay, or the couple might agree to sell the home and have both parties vacate the premises. Regardless of the living arrangements that you agree to, you should prepare for a possible increase in living expenses. You should also consider how a decrease in income—a common by-product of divorce—will affect your financial situation. As an example, you might consider downsizing before the proceedings begin if maintaining the family home is not a viable option.

Challenges for Disadvantaged Spouses

In a marriage, one spouse might handle all of the couple’s finances, bills, and expenses. In some cases, this same spouse is also the sole income earner. When these two realities are combined, it can create a serious disadvantage for the non-earning spouse. While maintenance and child support may be available, including while the divorce proceedings are pending, disadvantaged spouses often lack the knowledge or resources to pursue such provisions on their own. If you are in such a position, an experienced attorney can help, even if you do not have funds of your own. Do not forgo talking to a lawyer just because you lack available cash. Instead, find out what options may be available to you.

Kane County divorce attorneyApart from acknowledging how much will be needed for rent and basic monthly expenses after a divorce, it is all too easy, and common, for divorcing couples to find themselves shelving the financial aspect of the split until after the process is finalized. When you consider the emotional toll of the end of a marriage and additional stressors such as parenting plan arrangements, a potential relocation, and maybe even a new partner for one or both parties, money is often one of the last things couples wish to think about. This can be especially harmful for those who have very limited funds to begin with, or for those who have little to no employment options when the marriage unravels. 

The Importance of a Financial Game Plan

No matter how much or how little money you have to work with, the lack of a financial game plan can result in a divorce that does not turn out in your favor. For example, if you and your spouse were already in serious debt prior to the separation, those debts may only get worse and become more unmanageable if they are ignored. As overwhelmed as you may already be, avoidance is never the answer where your financial well-being is concerned, especially when you are about to experience a significant shift in income and overall lifestyle due to the split.

Why It Pays Off to Address Financial Matters Early On

Whether you have had minimal time to prepare, are currently a stay-at-home parent and do not know where to turn for help, or are simply scared and are avoiding money matters because your mind is on overload, making a plan to address finances early on can help you turn the situation around. Here are three reasons why addressing your finances is important:

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