Financial Mistakes during Divorce

Divorce can be very financially bad for a family.  Two separate households increases the family’s bills substantially.  Double the utilities and housing payment.   That alone can break a family. Unfortunately, many families that are getting divorced had financial problems during their marriage which help lead to the divorce.  One or both spouses spent irresponsibility or the parties didn’t communicate about money.  The following a few financial mistakes made by individuals getting divorced.

1) The Marital Residence

Real estate right now is a bad investment.  Appreciation is not going to happen anytime in the near future.  The cost of maintaining a residence (mortgage, taxes, insurance, water, sewage, repairs) far exceeds any tax benefit gained to most individuals.  Real estate also limits mobility if a job or better opportunity is to be had somewhere.  Any equity in residence is usually eaten up by broker fees and closing costs once the party awarded the property eventually sells. Much time and expense is spent trying to keep the marital residence, but most people are better off having the residence sold and getting it off their hands.

2) Just wanting to get it over with

Some of the worst divorce settlements are produced when one party just wants it over and gives away too much. Once you the divorce is done, it is very hard to go back and change the agreement.

3) Trying to get revenge

Individuals sometimes do “retail therapy” or start spending foolishly when getting divorced.  They are depressed or feel like the more they spend the less their spouse will receive.  In Illinois, spending money for a “non-marital” purpose during the breakdown of the marriage could mean a court could add that money you spent back into the marital estate and allocate it to you.  I have seen cases where one party only receives the money they spending during the divorce as the majority of their property settlemen