Saturday 23 March 2019

Factors To Consider When Planning Divorce Financing

By Joseph Baker


When couples are ending a marriage, most western countries do not allow lawyers to represent their clients for a share of the settlement they will secure. It is often feared that such a process can result in nastier divorces. The same rules, however, do not apply to financiers. This is why it is important to consider your divorce financing options before getting to the process.

In most cases, when you hear people discussing issues to do with separation of marriage and finances, they are generally discussing alimony, child support, and property division. However, it is crucial not to overlook one important financial issue relating to meeting expenses during the process. The attorney has to be settled and still pay for related filing costs. This can be a bit hard without ready cash.

It is not all divorces that require hefty sums of cash to process. When looking at an annulment that costs only some hundreds of dollars, chances are you will not be looking for support towards meeting those expenses. If on the other hand, are looking at a marriage separation costing tens to hundreds of thousands of dollars, be sure to have a plan for meeting those expenses.

Uncontested divorces are often cheaper because they do not get to trial. When you and your spouse come to some kind of understanding, the process is going to be less costly. However, when either of you is contesting, the case has the potential of dragging on. This adds to the costs you will pay the attorney, which can sometimes get to several thousands of dollars. Harmonizing belligerent issues saves the situation.

In some cases, however, it becomes difficult for the two partners to agree on contentious matters. In such a case, the process will have to get to trial so that each partner gets a lawyer to represent them. This is where you need to figure out the next move to finance the marriage annulment. A good rule of thumb involves blending traditional and non-traditional methods.

For the most part, traditional divorce funding is done using cash. In that case, you will have to figure out whether there is a regular savings account where you will access the cash with ease and pay the lawyer or any other costs in the case. Even for those with adequate cash in their checking accounts, by this time they are temporarily restrained from accessing joint assets.

More attorneys are starting to accept credit card payments these days. However, this is not the wisest financial option for couples. To begin with, credit card payments attract very high-interest rates. This will just help to make the annulment more expensive. As if that is not enough, most of the financial experts will tell you to pay your credit card debt prior to filing for separation of marriage.

It is not uncommon to find people funding their divorces using retirement accounts. However, financial experts advise against this plan unless you are sure of making alternative retirement plans when the time comes. Further still, withdrawing money from this account is charged a ten percent penalty as well as regular income tax.




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