Many couples who are going through a divorce in California need to face the fact that this process, and life after divorce, is financially draining. Not only are there attorney and court fees, but there will also be two households instead of one. Most couples do not make enough income to continue living the same lifestyle they had pre-divorce, and plans need to be set up to keep things financially secure.
According to U.S. News, a divorce can obliterate around 50% of one’s assets, and the impact can be devastating if certain steps are not taken. Even though it costs money, each spouse should hire trusted professionals to help them negotiate the divorce settlement. This will ensure the couple makes smart decisions.
It is a good idea to check credit reports before finalizing the divorce to make sure there are not any unknown debts they will be responsible for. To prevent a dip in one’s credit score, each partner should apply for his or her own credit card to begin building credit as a single person.
Crafting a new budget is also important. The total household income may decrease dramatically, and each person needs to know how to pay for expenses so there are no surprises.
Forbes discusses that divorce for those over the age of 50 has additional factors couples must consider. After years of marriage, there may be multiple credit cards, a mortgage and other joint debts. Couples need to divide these debts and then work with creditors to reassign the debt. If not, creditors can come after the other spouse if they do not receive payment from the one who is responsible for paying.
Retirement is also a big consideration for older couples. If starting over, make lifestyle changes to maximize 401k and Roth contributions.