Law Office of Joanne Kleiner

financial obligations

Aug 05

How Will a Divorce Impact My Financial Future?

How Will Divorce Affect My Finances?

Money is among the top three reasons why people choose to divorce. Unfortunately, the process of divorce itself can cause significant financial difficulties for one or both parties, as net worth typically drops by at least 50%. Divorce has immediate, short-term and long-lasting impacts on your finances, but working with a divorce lawyer and using an out-of-court mediation or collaborative process may help mitigate the effects of divorce on your bottom line.

Paying for a Divorce

Using an alternative dispute resolution process helps you stay out of the courtroom during divorce proceedings. However, you’ll still have to pay for legal representation, court fees and other expenses related to the divorce, such as document preparation fees. Depending on the length of your divorce process, how long it takes you and your spouse to agree to terms and whether or not there are child custody issues, paying for a divorce may be a considerable expense. Some people need to take out personal loans in order to pay for these costs.

Increased Costs of Living on Your Own

During a marriage, the costs of housing, utilities and food are typically shared. Maintaining two separate households costs more than one larger household in most situations. After a divorce, at least one party typically moves out of the family home. If you’re the one moving into a new residence, you’ll have to come up with the funds for a security deposit, utility deposits and more.

Lower Standard of Living

After a divorce, your standard of living is likely to drop. You may have less disposable income for restaurants, clothing and other niceties. Many people have to downgrade their vehicles, move to a lower-cost neighborhood or a smaller home and forego services, such as cable, television subscriptions or gym memberships. If you were a stay-at-home parent, your lifestyle could change drastically if you have to search for a job after being out of the workforce for a while.

Decrease of Your Net Worth

Your net worth includes real estate, investments, vehicles, jewelry, cash and other items of value. In most divorces, those assets are split between the two parties. Your net worth may drop by 50% or more. If you must pay spousal or child support, or if the court awards your ex-spouse more than 50% of the marital assets, your net worth could drop even further. With a lower net worth, you might find it more difficult to borrow money for personal needs, take on a mortgage or secure a business loan.

Difficulty With Sudden, Unexpected or Large Expenses

Married couples often have two incomes, which makes a sudden or unexpected expense less of a catastrophe. For example, when a married couple needs to replace the roof on their home, securing a loan or paying for the roof with monthly payments or cash on hand is usually a doable situation. If you had to pay to replace a leaking roof on just one income, the situation could be more challenging. You’ll also need to consider how divorce will impact other large expenses, such as paying for a child’s college education, replacing a vehicle or getting a new furnace.

Depleted Savings and Investments for Retirement

Pensions, Social Security benefits, stocks, investments and retirement accounts are all counted by the court when determining assets. Your ex-spouse may claim part of your pension funds, leaving you with less money for retirement. Many people dip into their 401(k) accounts in order to pay for their legal expenses or to purchase a new residence after a divorce. Depleting your retirement account may incur penalties and fees, especially if you’re younger than age 59 1/2. Your emergency fund may be depleted, and restoring it on your income alone could be a difficult task.

If you’re considering a divorce and have concerns about the financial impacts, you may benefit from an appointment with a Pennsylvania divorce lawyer. Call the Law Office of Joanne Kleiner at (215) 886-1266, or fill out our contact form to request a confidential consultation today.

Jul 17

Survival Tips for Living Together During a Divorce

Tips for an Amicable Divorce While Living in the Same House

When a married couple files for divorce, one person usually moves out of the marital home. However, there are times when the couple continues to live together during the divorce process. Some states require separate residences, but Pennsylvania is one state where you can still cohabitate during the divorce process.

Unconventional Living Arrangements

It may be unconventional, but many couples are choosing to live together until the paperwork is finalized. There are many reasons for a couple to cohabitate during the divorce process. In some cases, couples live together due to financial or legal reasons. For example, the law in Pennsylvania focuses on possession of the property. If one spouse wants to keep the house, they will stay in it and fight for legal ownership. Once one party leaves the property, they can often lose their rights for the home. In this situation, the property will be awarded to the other spouse.

In other cases, financial obligations are the reason that a couple continues to live together. If the split is amicable, they may decide it is cheaper to pay for one home rather than two separate residences. One spouse may not make enough money to move out and pay for rent. The couple can choose to live in the same house until it is sold or enough money is saved to move out.

If you are choosing to live in a marital home during your divorce, you will face some challenges. Whatever your reasons for sharing a home, there are a few ways to remain cordial during this process.

Be Cooperative

Despite these unusual circumstances, you want to treat your partner with respect. If you have children, this is very important to stay cooperative during the process. You may want to express your feelings about your spouse, but you must remain calm. It is normal to harbor some negative feelings, but you need to work through them and focus on being civil towards one another. You can create a healthy environment without any tension during the separation period.

Keep a Schedule

Communication is key to keeping a peaceful home with your ex-spouse. Once again, you need to think about the environment for the children. Divorce can be a difficult time for children, and they may not understand the reasons for your separation. You want to make sure your children stick to their normal schedule. Both spouses can decide on who will watch the children or take over certain tasks.

Discuss Finances

Financial problems are one of the main causes of divorce. If you want to live together, you will have to discuss the issues of finances. It is important to decide how the bills will be split between the two spouses. If you do not have any financial arrangement in place, the living situation will become tense. At this time, you may want to talk about spousal support as well.

Take Care of Yourself

During a stressful divorce, it is important to take care of your mental and physical health. You need to take time to recharge your batteries and find new interests. It is essential to schedule some time to meet friends, see a movie, or grab some coffee. You can turn the focus away from the divorce and spend more time focusing on you.

Need Some Help With Your Divorce Case?

There is no such thing as an easy divorce, and many of them are complex situations. During this time, there are many emotions involved. It can be difficult to make a logical decision. With a positive attitude and a supportive attorney on your side, you can make your divorce process less stressful. When you live with your ex-spouse, it can add to the already tense situation.

There are multiple elements and challenges for any divorce. You want to have an experienced attorney to help with spousal support, child custody, and other issues. You can contact the Law Office of Joanne Kleiner at 215-886-1266 for a consultation about your Philadelphia divorce case.