There are several questions that run through your mind as you are preparing for a divorce. One important aspect that people often overlook is the cost of divorce. You probably know that divorce is expensive. You have seen it on television or read it in a magazine. Maybe you even heard it from a close friend who went through the same. While you might know it that it's true, it isn't until you are in the middle of it that you realize the full extent of the cost of divorce.
Some divorce expenses are avoidable. Sadly, others are not. It may surprise you that the simple actions you take at the onset of your divorce have an impact on the overall cost of divorce.
You can't always avoid certain costs such as attorney fees. Even if it’s not possible to reduce the costs altogether, you can prepare for them, which can help reduce your stress. This gives you the opportunity to budget so that when the time finally comes, you don’t feel like you are in a financial squeeze.
Divorce and Finances
So, what is the final cost of a divorce? Well, as it turns out, this is a loaded question that is practically impossible to answer because every divorce is unique. Some reliable sources on the internet claim that the average cost of divorce is anywhere between $4,000 and $15,000. This varies depending on whether it’s a contested divorce or a more amicable one.
When people think of the cost of divorce, they often think of attorney fees. But you might not know that there are other legal fees with divorce as well. If you are the one filling for a divorce, you have to to pay a fee of $170 if you don't have a lawyer and $180 if you have representation. If you need to use a Professional Process Server who will serve your spouse with the divorce papers, then it is going to cost you between $50 and $200, or more depending on the complexity. Furthermore, if you need to file a motion during the divorce so that a judge can take action in your case, you are looking at a $31 motion filing fee.
Before Filing for Divorce
You need to understand that you cannot serve your spouse with the divorce papers yourself. However, there are cheaper alternatives to go through this process. One method is having your spouse accept the papers and officially acknowledge they have received them. Another method is using certified mail. While some of these legal fees seem costly, properly planning for them will help save you money down the road. Without knowing all the specific details of your case, it’s hard to determine what kind of divorce services you will need. This makes it difficult to determine an exact figure of the total cost of divorce.
What’s more frustrating is that your divorce is likely to hit hard on your wallet even after the court issues its decree. It’s a common misconception that once you sign the papers, there are no more divorce tasks. There are a whole lot of post-divorce responsibilities that you need to take care of. You will soon realize that a number of divorce expenses will continue to pile up years after you and your spouse have parted ways.
Unexpected Cost of Divorce
Getting a divorce is perhaps the hardest process in a married couple’s life. But sometimes, it’s the best option, despite how heartbreaking it is. Although you had the best intentions going into your marriage, things happen, and when they do, it might be in your best interest to throw in the towel and move on.
Again, there are certain steps that you can take to ensure your protection. But even if you go ahead and follow these steps, costs you don't expect can blindside you. If you are not careful, the financial fallout from a failed marriage can haunt you for years to come. When you estimate much how much your divorce will cost, always prepare for more.
Division of Assets
Over the span of your marriage, you and your spouse are likely to gain some assets, and you might accrue debts just like any normal couple. For example, your car is an asset, the mortgage on your house is a debt. When you decide to end your marriage, it can be a bit messy cleaning up everything. There’s usually a lot to take into consideration, including how much you are dealing with in terms of debts and assets, and where you are currently living.
You need to understand that it is going to be a more taxing process than you had figured, and you might need to seek legal counsel in the process. Often, when people go through traumatic emotional episodes such as a divorce, they need counseling. Post-divorce counseling is a cost that many do not take into account.
While it might seem a bit trivial, considering everything that you might be going through, moving is expensive. Often times, during a divorce, you might find yourself in a position where you need to make new living arrangements fast, which is costly.
This includes the actual cost of moving, packing, getting movers or a truck to transport your stuff to your new place, and the initial cost of renting your new living space. By adding in the first and the last month’s rent, plus the deposit, you are dealing with another unanticipated expense, not to mention all the paperwork involved.
It goes without saying, but spousal support or alimony needs to be part of your calculations for the cost of divorce as well. It’s surprising that most people do not take the time to consider this. However, if you are the sole provider, this will sting.
The amount of money that you will end up paying depends on a number of factors. This includes where you live and how much money you make. You will also need to take child support into consideration, which often amounts to hundreds of dollars.
As a parent, you were already providing for your children. In theory, that is money you were already spending. Unfortunately, the current child support system has a way of eating through your finances more than you might expect. Child support has a strict emphasis on the collection of payments, which sounds good, but is often counterproductive when it comes to low-income parents.
If a non-custodial parent does not have a job or currently earns substantially less than when the court issued the child support order, the payments will not decrease or pause. Unless the parent files for child support modification, the arrears can rapidly accumulate. Before long, you can find yourself in a vicious cycle of debt. For this particular reason, it is important that you immediately file for modification if you have any substantial change in your income. This process is complicated, and it is advisable that your attorney helps you through the process.
Most married couples have their insurance charges intertwined. This normally includes health plans, home insurance, dental plans, auto insurance, and many others. When you decide to get a divorce, it often means dissolving all insurance plans and getting new ones. This is a strenuous and expensive ordeal for a single individual. Again, this is often something most divorced couples fail to consider when adding up the cost of divorce.
A divorce is a traumatic experience, and more often than not, people don’t take it seriously enough. It is important to see a counselor when your marriage falls apart. If you are struggling to get over your failed marriage, seeing a counselor is often beneficial.
Too many people don't get help, and instead, they opt to tough it out. If there are children, they might need someone to talk to as well. A counselor can help them understand the situation.
Managing the Cost of Divorce
Some legal costs might seem costly but can save you a lot later on. A good example is mediation. If you and your spouse decide to mediate your divorce, you will have to pay a private mediator by the hour for their services. In most cases, mediators are also divorce attorneys, and their charges are more than likely the same as their legal fees.
If you and your spouse decide to settle your divorce through mediation, it means avoiding the significant expenses of motions, discovery, and trial preparation as well as the trial itself. Legal fees when a divorce case to trial are expensive and often costs tens of thousands. Avoiding these kinds of expenses by sharing the costs of mediation will go a long way in reducing the cost of divorce. Not to mention the non-financial advantages of having your divorce settled sooner, and on your own terms, amicably.
Another unexpected cost of divorce is the cost of an expert to provide valuations for assets gained within the marriage. You will not require an expert to determine the value of assets such as bank accounts, home, car. But for complicated assets such as a family business, the valuation of an expert is required. In most cases, experts who have strong credentials are expensive but worth it in the end.
A good example is if your family business is subject to division during a divorce. The valuation expert may claim it is worth $250,000. You could simply choose to accept the valuation and your share of the business settlement based on that specific amount. If a valuation practitioner determines your family business is worth twice what your spouse claims it is, this increased amount will make up for the cost of the expert’s fee.
Divorces often lead to unexpected costs, which are not necessarily connected to the legal matter at hand. You will experience increased living expenses, whether you move out of your marital home or not. This is because you will no longer be sharing the costs involved with another adult. After a divorce, you are likely to incur increased childcare expenses. This is because your spouse is no longer at home when you have to work late or travel. Chances are you will have to hire help in the form of a nanny or a babysitter. Therefore, when you are planning your budget, it’s very important to take these variables into account.
The most effective way to reduce the cost of divorce is by settling the matter out of court. Litigation is brutally expensive. Therefore, it's advisable that you and your spouse work together to sort out as many things as possible. At the end of the day, you will both save a lot of money.
You also need to make sure that you try to minimize attorney fees as much as possible. One of the most effective ways you can do this is by staying organized. This means you can account for every interaction with your divorce attorney. Avoid calling your attorney’s office every time you have a question. Instead, sum up all your queries in one email, call or message per week.
As previously stated, mediation is a very effective way of reducing the cost of divorce. More so when both you and your spouse want to reach a fair settlement. This normally involves paying your mediator by the hour. It is costly, but it gets you out of going to trial, which is more expensive.
Going from Double to Single
Divorce is life-altering, and it can take several years to fully recover both emotionally and financially. However, the ramifications should not prevent anyone from pursuing a divorce. If your marriage is not working, and you truly cannot salvage it, then divorce is unavoidable. This is true regardless of factors such as finances.
When you finally decide to move out, it is important that you factor in all the underlying costs. A new place will come with new expenses. Therefore, consider the cost of your security deposit, and the replacement of all household items that you might lose in the divorce.
Another thing that often gets forgotten is you will have to pay for more insurance. Since you will not be sharing your insurance with your spouse, it will cost more. This is probable, even with markedly reduced coverage. If you also had insurance through your spouse’s job, you might qualify for COBRA coverage. However, it’s important to note that it only lasts for 18 months.
After your divorce, you must rebuild your finances. One of the first steps will involve taking an inventory of your net worth, which includes your assets and liabilities. If you notice that your net worth is lower than you deem comfortable, it is important that you consider some big lifestyle changes. This might involve leasing a less expensive car or selling your house.
You will also have to look at your current expenditure and compare it to your income. Scrutinize the money that you are getting in versus the money going out. If you are spending more than you bring in, you will end up relying on credit to make up for the difference. It’s advisable that you do not use your new financial situation as an excuse to get yourself into debt. This is because it could take you into a financial spiral that can take years to climb out of.
When financial struggles are on the horizon, the dream of a happy post-divorce life is harshly reduced. This often results in trading one state of unhappiness for another. Starting to examine your finances early during your divorce will go a long way in helping you determine an easier way to a more realistic outcome.