How Can a Divorce Affect Your Finances: Your life will change completely when you get a divorce. You will have to part ways with someone you loved, someone you spent a significant part of your life with. It’s not easy, and it can make you feel down for a while.
Divorces don’t affect the parties involved just emotionally, though. They can also have a great financial effect on the two spouses, especially if a custody dispute is involved too. And like the costs of the divorce itself are not enough, you will also have to pay for legal advice.
Nevada has a divorce rate of 10.2 per 1,000 inhabitants, so with so many divorces, you will be able to find lawyers in your area. If you live in Henderson, you will have to hire a Henderson divorce lawyer so they can help you.
So, how exactly will your finances be affected by a divorce? Read this post and find out.
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Table of Contents
Legal Fees
Apart from paying for your lawyer, there will be some legal fees you’ll have to deal with. That being said, you will have to handle payments for child therapists, financial analysts, appraisers, and expert witnesses, as well as costs for legal filing fees, court fees, and document copying and dissemination.
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Health Insurance
When you’re getting a divorce, you may also have to pay for health insurance. This will depend on whose plan you were under during your marriage.
The divorce will make you lose the coverage you had from your previous partner. If you don’t have a job or do not get health insurance through your employer, the chances are that you were relying on the insurance of your spouse. But after the separation, you will become responsible for your own health insurance and will have to pay for it.
About 25% of women end up losing their health insurance for a certain amount of time after going through a divorce, according to Your Divorce Questions. It is something that can happen to everyone, so men can be affected by it too. It is essential to be prepared for this issue.
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Credit Cards
Having joint credit cards can also be an issue during the divorce. For instance, if you had a joint account, one of you will have to be removed from the account. The entire process can be quite complicated, especially if you both have debt there that you’re responsible for. The credit card provider will have to make changes to the contract and remove one of the parties from it.
Usually, the credit card issuer will look at whether the person who remains on the contract qualifies without the credit history and income of their former spouse. If they don’t, then the other party cannot get removed.
But if you do not have a joint account and you only have your former spouse as an authorized user on your credit card, things will go more smoothly. The other party can be removed from the credit card if you call the issuer of the card.
The entire situation may affect not only your finances but also your credit score if you do not make payments or you’re unable to divide your debt properly.
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Child Care Costs
When the marriage resulted in children, you will have to cover child support. It will not be a small amount, and if you are the one having to pay these expenses, you should be prepared.
For instance, in Nevada, according to the Economic Policy Institute, the annual infant care cost is $11,408. Other states have even higher child care expenses. Minnesota’s annual infant care cost is $16,087, and California’s is $16,945.
This can have a huge impact on your children, though, because it will affect the amount of money you have for food, utilities, and other necessary things. If you do not have enough money to cover the expenses of the children, it will be harder to meet their needs.
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Retirement Plan
Your retirement plan was obtained through your employer. But that doesn’t mean it will be all yours if you are married and getting a divorce. In fact, these plans are considered “marital property”, so both you and your spouse can get a part of the assets when getting divorced.
The retirement plan can be split using a Qualified Domestic Relations Order. The money will then help pay marital property rights, alimony, and child support to your former partner. This will impact your retirement plan.
Final Thoughts
Before getting a divorce, make sure you are ready, as it can have a huge emotional and financial impact on your life. Otherwise, it may have devastating effects on your finances.