Getting divorced can be incredibly stressful. One of the main reasons for this is that both parties tend to worry about money, in terms of both the divorce procedure and how each party will cope financially after divorce. Follow the five-step guide below to budget your divorce procedure.
1. Work out the costs of getting divorced
The costs associated with getting divorced vary depending on where in the country you live; however, your initial outlay will involve paying for legal advice. This is essential for you to become properly informed about the process and to ensure that your rights and interests are protected. Additionally, a charge is affixed to applying for an ancillary relief order, which sorts out financial issues in the short term; although, if you can resolve financial issues without this, there will only be a small charge to make your agreement binding in the form of a consent order. If you are unable to meet your legal fees you may qualify for legal aid. Costs are usually absorbed by both parties, but some couples agree that the better-off partner will pay all costs; or as an alternative, other tips for cutting the cost of a claim can be shown here.
2. Go through the family finances
Both parties should have a firm handle on the family finances not just to help work out how you will pay for the divorce, but also to help you both plan for your separate lives after divorce. This includes deciding if either party will remain in the family home and how any mortgage repayments will be maintained, as well as building up a picture of your family’s overall standard of living. This will become relevant when you and your partner are trying to work out any financial settlement.
3. Notify all the relevant people
Ensure you notify relevant government agencies, as well as your bank, of your change in circumstances. This is particularly important if you have a joint mortgage, joint bank account or credit cards. If you are going to remain in the family home with any dependent children, then notifying HMRC as well as benefits agencies could help you financially, as you may become entitled to Tax Credits or another type of financial aid. Additionally, if you are the only working adult in the property, notify your local authority so you can make sure that you receive a discount on your council tax.
4. Try to keep it as amicable as possible
Believe it or not, there are financial benefits to keeping divorce as amicable as possible. If you are able to, avoid court battles and opt for mediation. This is an alternative for divorcing couples to try to agree their divorce settlement between them with the help of a professional mediator, but will only work if both parties are willing. Alternatively, while you might decide to divorce as soon as problems arise, some couples prefer to wait until financial circumstances improve or children are older.
5. Have a post-divorce financial plan
It is important for your divorce settlement that you have a realistic plan of what you will need to pay out for after your divorce. This will include fixed outgoings such as rent/mortgage or utilities, but can also include provision for holidays, children’s school fees, etc., if these things were part of your married life.
There is no doubt that getting divorced ranks highly as something that nobody wants to do; however, it does unfortunately happen. The above guidance should be of some assistance but there is no substitute for legal advice, so consult a solicitor or the Citizen’s Advice Bureau.