Understanding Finances in Your Divorce Case
UNDERSTANDING FINANCES IN YOUR DIVORCE CASE
There are a number of things you should understand in your divorce case as it relates to finances. The most important of these are dividing income and debt at the beginning of your case, understanding your overall financial picture, and using a budget effectively in your divorce.
DIVIDING INCOME AND DEBT AT THE BEGINNING OF YOUR DIVORCE
At the beginning of your divorce case, it is important to accurately divide your income and debts. This ensures that each party has enough money to meet their financial obligations and that all bills continue to get paid. If your attorney cannot reach agreement with opposing counsel regarding how finances will be handled while your case is pending, then you may have to have a hearing in front of your judge. You can help your attorney by providing accurate information regarding your income and expenses early in your case.
USING AN ASSET AND LIABILITY WORKSHEET
After you have resolved your interim financial issues, you should turn your attention to the overall financial picture of your divorce case. The easiest way to do this is to use an asset and liability worksheet. This worksheet can be used to list all of your assets along with any associated debt. This will provide you with a comprehensive picture of how your assets and debts should be fairly divided.
PREPARING A BUDGET IN YOUR DIVORCE CASE
Let’s be honest. People HATE preparing budgets. Your failure to do this in your divorce, however, can have disastrous consequences for the resolution of your case. This is especially true if there is a claim for alimony (also known as spousal support) in your case. The court always looks at need and ability to pay of both parties when making alimony determinations, and in this regard your budget is of ultimate importance.