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How Divorce Can Impact You Financially

Financial turmoil often follows a divorce. The process of divorce and separation itself is costly. The income or wealth that supported one...

Financial turmoil often follows a divorce. The process of divorce and separation itself is costly. The income or wealth that supported one family is split between two families. It can be hard to maintain the same standard of living before divorce for the following reasons:

Child support

After a divorce, one spouse may end up with child custody and the other with child support. According to the Census Bureau Reports, the average monthly cost of child support in the US is $430. Child support is based on income before tax and the number of children—the more that the parent earns, the more they will typically have to pay in child support. And generally, the more kids the couple has, the more the payment will be.

Child custody

In many cases, children primarily live with one parent following a divorce. The increased parental responsibility for that parent can hold him or her back from employment and business pursuits. If the other parent fails to pay for child support, the custodial parent must make ends meet independently.

Three out of four divorced women don't receive full child support. That can greatly impact the well-being of their children. They can miss out on proper nutrition, good education, and activities like sports and summer camps.

Alimony

Before signing the papers, divorcing couples must consider one more financial thorn in the flesh—alimony. This is a spousal payment that a man or woman may be required to pay to the other spouse.

Alimony is awarded in a long-duration marriage where one spouse earns considerably more, putting the other in a dependent position. Alimony and child support combined often take up to 50 % of the paying spouse's income.

Division of property

The division of property can be done amicably between the divorcing spouses without the intervention of the court. However, things can go wrong here. Separate property, such as the gifts and inheritances of one spouse, maybe unfairly added to the items' list to be divided. Working with a divorce lawyer can help to achieve an equal and fair sharing of wealth after divorce.

Filing for bankruptcy may reduce the divorcing couple or spouse's debt obligations. While some couples file for chapter 7 or 13 bankruptcy prior to their divorce, others choose to wait and file separately once the divorce becomes finalized.

Although financial stability often substantially diminishes following divorce, couples that work together during the process are often able to offset many of its costs.


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