It is an understatement that the 2020 year presented us with unexpected and unprecedented challenges. The pandemic has affected various aspects of our lives and for some, that includes their marriages. The combination of the post-holiday season, the Covid-19 “Break-Up Boom”, and the introduction of the vaccine is causing many people to ring in the new year with filing a divorce or contemplating doing so.
Given the ongoing and widespread uncertainty, you may be feeling anxious and uncertain yourself about whether to follow through with a divorce. I’ve provided some tips for you to consider before filing for divorce, especially during this unprecedented time.
1) Inventory of Assets and Debts
It is helpful for you to know what you have. While it sounds obvious, it is not unusual that one spouse manages the finances in the marriage and the other spouse becomes more uninformed of the parties’ financial situation. If you are uninformed, this can be an overwhelming task that prevents you from taking the first step towards divorce. Your attorney can take steps to discover this information during the divorce, but you should also take some time to gather information, so you have some idea of the marital assets and debts. If you have no idea where to start, here are some first steps:
- If you own a home, find your last mortgage statement to see what the outstanding mortgage balance is. If you recently purchased the home or refinanced the home, contact the bank to see if you can get a copy of the appraisal.
- Use www.kbb.com to figure an estimated value for your vehicle (using private party value). If there is a loan against the vehicle, contact your bank to inquire what the outstanding balance is and collect a statement.
- If you have retirement and/or investment accounts, gather statements for any accounts in your name.
- Gather bank statements for the accounts that your name is on. It is helpful to have the last 12 months of statements for each account.
- Run your credit report to find out which debts your name is on. I suggest doing this, even if you are familiar with your debts. Try using Experian or TransUnion for up-to-date credit reports. Your bank or credit union may also offer a free credit report.
2) Plan Your Budget.
Sitting down and creating a monthly budget can be tedious and stressful; however, it is essential. The cost of two households is more than the cost of one household, so your post-divorce budget will be very different. I suggest that you begin creating your budget by itemizing the following expense categories and subcategories, then figuring how much you expect the expense will be post-divorce.
- Housing (mortgage/rent, utilities, insurance, property taxes, maintenance, internet, cable, and phone);
- Vehicle (monthly installment loan, insurance, vehicle maintenance, gas, and registration);
- Personal (food/dining out, clothing, incidentals, entertainment, travel, and gifts and charitable contributions); and
- Monthly Payments (life insurance premium, health insurance premium, membership fees, subscriptions, credit card payments).
3) Living Arrangements.
Many people are ready to establish separate residences after extensively quarantining together. Before you rush to sign a rental agreement or purchase a home, it is wise to discuss your plan with an attorney. You will want to ensure that your living arrangement is financially feasible and a long-term option. If you prematurely purchase a home, it could affect which other assets you will be awarded in the divorce (and usually they are assets you need). Unless you are involved in a domestic violence situation, it is worth having a plan before jumping into a new living arrangement.
4) Child-Related Matters.
The pandemic has presented numerous unprecedented issues in family law. While some children are attending school in person, others are learning virtually, and some are quarantining. This has demanded parents and families to coordinate accordingly. Adding a divorce to an already complicated situation can make coordinating schedules even more difficult. If you and your spouse disagree on how to approach certain pandemic-related issues that affect the children, it would be wise to discuss with your attorney before taking any action. The courts have varied on how pandemic considerations may affect custody of the children.
This article is intended only to be informative and is not a substitute for comprehensive legal advice.