Category Archives: Divorce Finances

Divorcees Prefer Silence When Facing Financial ProblemsPeople who have filed for divorce are less likely to talk to others about their personal finances, according to a recent CNBC survey. Amongst the survey respondents who were divorced, 56 percent said that they rarely speak with family members about their money. Only 27 percent of all the survey respondents gave the same answer. There is nothing wrong with financial discretion when talking to family members. However, divorcees put themselves at risk if they do not talk to anyone about their financial troubles.

Reason for Silence

People dislike sharing their financial concerns with friends and family because they may be embarrassed about their situation. Unfortunately, divorce causes financial trouble for some people because:

  • They are primarily relying on their individual incomes to support themselves;
  • They lost some of their marital properties as part of the divorce;
  • They may have new expenses, including purchasing or renting their own homes; and
  • They may be required to pay child support and spousal maintenance.

It takes humility to admit that you need help despite worrying whether people will think less of you because you are struggling to pay bills and control your debt. Even if you are not in financial danger, you may be embarrassed to show that you cannot afford the same lifestyle as when you were married.

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Create Your Own Savings Before Filing for DivorceBeing able to afford your divorce may be one of your largest obstacles when you are considering whether to end your marriage. You will need enough money to hire a divorce attorney and support yourself when the process starts. You cannot rely on being able to immediately access the money in your marital accounts, which may be frozen. If you are financially depending on your spouse, it could take months to establish spousal maintenance payments. In order to afford a divorce, you can start saving money while married and consider other sources of financial support.

Emergency Fund

You need a source of money that is independent of your marital bank account. It could be an individual savings account or cash, as long as it is secure and easily accessible. Your savings should come from individual sources of income because taking the money from a joint account will draw suspicion from your spouse. The money could be:

  • A portion of your regular wages that you divert into the account during every pay period;
  • Gifts that you receive from family and friends; or
  • Earnings that you receive from doing various jobs.

You should use this money only for divorce-related expenses and your basic living needs after filing for divorce. While an emergency fund can stay secret during your marriage, you must disclose it during your divorce because the money could be marital property. Keep a record of where the money in the account came from. Your spouse may have an emotional reaction to learning about your emergency fund. Expect that he or she will be upset with you and demand that you explain.

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Guarding Your Business from Your DivorceYour efforts to protect your business from a possible divorce should have started at the beginning of your marriage. Keeping your business finances separate from your personal finances prevents your spouse from claiming ownership of your business. You can also create a premarital agreement that gives you complete control of your business in case of a divorce. Without these protective measures, your business is a marital property that you must account for in the division of property. You can maintain control of your business after your divorce, but it may require some sacrifices. Here are four steps to protect your business during your divorce:

  1. Separate Business from Marriage: Your business may already be a marital property if you invested marital assets into it. Moving forward, you should create a wall between your business and personal finances. Have separate accounts for business and personal expenses and do not transfer money between them. Limit your use of marital properties as part of your work. You should have separate business and personal finance records.
  2. Ease Your Spouse Out of the Business: Your spouse should no longer be involved in your business, whether as an owner or an employee. You can offer to buy his or her ownership interest in your business. You can fire your spouse as an employee but should understand the consequences of this action. By cutting off your spouse’s source of income, he or she will be more dependent on you following the divorce. You can instead lessen your spouse’s role in your business and encourage him or her to seek new employment.
  3. Assess Your Business: You need an accurate value for your business to ensure a fair division of property. Overvaluing your business means you will give up too much in order to keep it during the division of property. You must assess both the current and future value of your business. You can be conservative in projecting your business’s growth and the economic outlook for your industry.
  4. Identify Bargaining Chips: You will need to give up other valuable marital properties in order to keep complete ownership of your business. Privately decide which properties you are willing to sacrifice but do not lose leverage by letting your spouse know the properties you think are expendable. Your marital home may be your most valuable bargaining chip.

Your Business as a Marital Property

By protecting your business, you are also protecting your source of income and something you have invested great time and energy into. A Kane County divorce attorney at Goostree Law Group can give you strategies for keeping your business during a divorce. Schedule a free consultation by calling 630-584-4800.

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Stress from Student Loan Debt Can Lead to DivorceA recent report by the website Student Loan Hero claims that student loan debt is contributing to couples’ decisions to divorce and affecting when they divorce. In a survey of more than 800 divorced adults:

  • 13 percent of the respondents blamed student loans for their divorces;
  • 35 percent of the respondents with student loan debts said that the debt caused them to delay their divorces because they could not afford the process; and
  • 58 percent of divorcees with student debts had to take on additional debt to pay for their divorces.

With the cost of higher education increasing, student loan debts are likely to continue to be a problem for people during their marriages and divorces.

Student Debt Leading to Divorce

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Steps Needed for Financial Success After DivorceMuch of your work during your divorce will go towards ensuring that you are financially viable afterward. Through the division of property, you will lose assets that you may have been counting on for both your short-term stability and long-term investing. Holding onto key assets and establishing fair support payments is vital in reworking your financial plan. However, your divorce agreement is a starting point and not the end goal. You must follow through with wise decisions so as not to squander your hard work during the divorce.

Immediate Actions

When your divorce becomes officials, there are several changes you must make to acknowledge that you are no longer married:

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Goostree Law Group

Goostree Law Group

 555 S. Randall Road, Suite 200
St. Charles, IL 60174

 630-584-4800

 1770 Park Street, Suite 205
Naperville IL 60563

 630-364-4046

 400 S. County Farm Road, Suite 300
Wheaton, IL 60187

 630-407-1777

Our Illinois divorce attorneys represent clients in Kane County, DuPage County, Kendall County and DeKalb County, including Geneva, Batavia, St.Charles, Wayne, Wasco, Elburn, Virgil, Lily Lake, Aurora, North Aurora, Elgin, South Elgin, Bartlett, Crystal Lake, Gilberts, Millcreek, Maple Park, Kaneville, LaFox, Yorkville, Oswego, Plano, Sugar Grove, Big Rock, Bristol, Newark, DeKalb, Sycamore, Naperville, Wheaton, West Chicago, Winfield, Warrenville, Downers Grove, Lombard, Oak Brook, Streamwood, Hoffman Estates, Barrington, South Barrington, Lake Barrington, Schaumburg, Big Grove, Boulder Hill, Bristol, Joliet, Kendall, Lisbon, Minooka, Montgomery, Plainfield, Sandwich, Yorkville and many other cities.

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