Archive for the 'Divorce & Finances' Category

Thrifty Couples are the Happiest

Tuesday, June 28th, 2011

Research from the University of Virginia’s National Marriage Project suggests that consumer debt assaults marriages and “plays a powerful role in eroding the quality of married life.” In fact, if spouses argue about finances once a week, their marriage is 30 percent more likely to end in divorce than those who fight about money less frequently.

According to Jeffrey Dew, an assistant professor of Family, Consumer, and Human Development at Utah State University and the author of the Marriage Project’s report Thrifty Couples Are the Happiest, “[c]onsumer debt fuels a sense of financial unease among couples, and increases the likelihood that they will fight over money matters; moreover, this financial unease casts a pall over marriages in general, raising the likelihood that couples will argue over issues other than money and decreasing the time they spend with one another….”

Consumer debt, Dew says, is also “an equal-opportunity marriage destroyer. It does not matter if couples are rich or poor, working class or middle class. If they accrue substantial debt, it puts a strain on their marriage.”

By comparison, assets “sweeten and solidify the ties between spouses. Assets minimize any sense of financial unease that couples feel, with the result that they experience less conflict….”

Fighting over money changes the center of gravity in a marriage. “[C]onflict over money matters is one of the most important problems in contemporary married life. Compared with disagreements over other topics, financial disagreements last longer, are more salient to couples, and generate more negative conflict tactics… ”

Newly wed couples can start out on the right foot steering clear of materialism and consumer debt; they “are much more likely to enjoy connubial bliss.”

A Big Cost in a Divorce

Wednesday, September 8th, 2010

Discovery is the formal way of spouses headed for divorce warfare – sometimes a divorce trial – gathers information in preparation for battle.

Discovery, which is done pursuant to the rules of the court, greatly adds to the cost of a divorce, so it usually happens in contested actions.

Usually, during discovery one party subpoenas the other for documents and records. All manner of documents and records can legitimately be requested, and the opposing party who fails to respond can be found in contempt of court.

These documents include interrogatories, which are written questions answered under oath; documents of all sorts; oral depositions, which are statements to questions asked under oath by the opposing counsel; subpoena Duces Tecum, which demands the production of documents by their legal custodian; subpoena Ad Testifiicandum, which demands that the custodian testify about the document; request for admissions, which are answers to question that therefore become facts in the record; notice in lieu of subpoena, which compels a person to appear in court; notices to enter land and inspect property.

Often one side asks more information than can possibly be used in the action, and what are termed “fishing expeditions,” such as inquiries into confidential relationships, are generally not permitted.

Budget Blues

Monday, August 23rd, 2010

The truth of divorce is that it is a great destroyer of wealth. Very few people, caught in the vortex of a failed marriage, appreciate that their divorce will cast a long shadow on their lives a long time after the judge signs the divorce decree.

A couple in an intact marriage who managed a house and home quite easily very often find themselves struggling to manage two households as separate people. To some it comes as quite a shock to have to think twice about out-of-pocket expenses that once were incurred without a second thought. Or to tell a child reeling from the pain, suffering and dislocation of his parents divorce that he cannot go to camp this summer because the money is not there.

Custodial mothers in particular very often find their finances to be a pillar-to-post struggle where an unanticipated bill signals a crisis. Living paycheck to paycheck adds even more stress to the already stressfully existence of a solo mother.

To the point here, divorce very often means that the former spouses now each have to live on budgets – explicit plans that realistically show income and expenses. Very often this plans may require that the former spouses cooperate with each other, for example, paying spousal and child support promptly.

Divorcing couples face a myriad of decisions, particularly in the early days of separation and divorce, and the prospect of sitting down and making a budget, which many find unappealing under the best of conditions, is even less appealing in the wake of a marital collapse. However, a failure to face the fact that a divorce has changed financial circumstances, that a budget is now inescapable, and that the days of easy living are gone for a long time carries a stiff penalty. Separation and divorce are tough enough without the budget blues making them even more difficult.

Paying the Bills on Time

Monday, August 16th, 2010

Couples in the midst of a divorce very often lose many of their established routines, for example, who pays what bills when. It’s not that they don’t have the money; it’s just that in the enormous confusion and dislocation of a separation, one or both spouses simply forget to pay the bill.

Creditors are unmoved by such excuses. Late payments not only mean late charges (an expense that no one wants and divorcing couples can ill afford) but also increase the risk of damaged credit ratings. And the last thing a divorcing person wants to add to his or her list of woes and worries is a damaged credit rating.

Preventing late or missed payments usually means that the couple work out some kind of interim routine about paying the bills. Prompt payment of the regular bills (mortgage, utilities, property taxes) is worth cooperating with a separated spouse.

Many divorce financial planners recommend that the separating couple immediately cancel any joint credit cards and transfer the unpaid balance to a card in the name of the spouse who will responsible for its payment.

When it comes to bills, divorcing couples should remember joint and several liability. This means that a creditor can move against either spouse for a bill that is in both their names.