Recession Makes Changes to Divorce Process

While it comes as no surprise that the recession is causing difficulties in practically every area of life right now, you may not realize how much the recession is influencing divorce proceedings. People use the recession as an excuse to cut back on costs, but be careful; cutting back on your divorce can cost you far more in the long run.

More people are choosing to separate instead of divorce.

One of the biggest changes in divorce right now is that more and more people are choosing to separate instead of divorce. People are trying to save money on court fees and attorney fees, and choosing to live apart without going through the legal process of divorcing. This may be an acceptable solution to some people, but keep in mind that your spouse still has certain legal rights as long as he or she is your spouse.

If you want to terminate those legal rights, a separation doesn’t cut it; you need a divorce. Be mindful of things like account access, access to creditors and debtors, joint accounts and tax liabilities. Your spouse may have access to all of these things as long as you’re still married, and you may have responsibilities and duties related to these issues until the moment you’re divorced.

Especially in a poor economy, you must pay attention to a divorce settlement.

Even in an amicable divorce, you’ve got to pay attention to your divorce settlement in a poor economy. You might not want to do it, but it’s in your best interests to know where every penny is going, and ensure you and your spouse get an equitable split. Don’t lose out on what you deserve because you’re unwilling to push for your rights. Insist on what’s yours by right, because you never know if you’ll get laid off the day after your settlement and be wishing you’d pushed for more.

Make sure you get what you need for child support.

Child support can be a slippery slope, and it’s typically a point of contention in a divorce settlement. Especially with the economy in such bad shape, it’s vital that you get what you need for child support. Be realistic about your needs; don’t underestimate what you’ll require to get by, and then get stuck struggling to make up for the shortfall. Your children should not suffer because of your divorce, and a poorly-negotiated child support agreement can be a bad thing for the sake of your kids.

Beware of taxes and hidden fees when you’re filing a divorce settlement.

A divorce settlement isn’t just about who gets the money or the furniture; it’s also about how you’re splitting debt and liabilities. Don’t forget about your debt and potential tax liabilities when you’re negotiating a divorce settlement. Likewise, be careful about money in a retirement account; if you withdraw funds early, even to transfer to a separate account, you may face tax penalties. Make sure you consult a professional to avoid hidden fees and ensure your finances are protected both at the time of your divorce and also down the line.

Don’t cut back on legal representation to save money.

It’s tempting to opt not to use a divorce lawyer when you’re trying to save money and get a divorce cheap. Think twice before you cut back on legal representation, though, because what you think you’re saving in fees could be more than accounted-for in flaws in your divorce settlement. You need an advocate to look out for your interests – especially in a down economy. If you don’t use proper legal representation, you may find yourself owing thousands of dollars in debt you didn’t think about, and have no provision in the settlement to handle it.