NEW YORK (Money Crashers) — It goes without saying that divorce is no picnic. In fact, it may seem easier just to get the whole mess over with than spend time thinking about it. For those who can afford a full-service lawyer, that may indeed be the best approach.
But if you don't want to get fleeced financially on undoing your vows, consider these tips to minimize your outlay:
1. Wait to get a lawyer. If you've just realized a divorce is imminent, you're likely feeling any range of strong emotions. For this very reason, wait to hire a lawyer for anything beyond help with the initial filing. Making important decisions, such as whom to hire at $300 or more an hour, is always better done when you're calm and collected. (Or at least more calm and collected than you're likely to be after the initial shock.)
Taking a breather before jumping into proceedings will also help you assess what kind of lawyer you need, or if you need one at all. Educate yourself regarding your options and the legal expenses. Then give yourself a week or two to forget about it all before you revisit.
2. Avoid a litigated divorce. A litigated divorce is where a judge makes the final decision on the division of assets, support payments and visitation. But if you think you and your spouse can come to an agreement without heavy court involvement, you have other more affordable divorce options at your disposal, including a flat-fee divorce, arbitration, a collaborative divorce or mediation.
If your situation is very simple and you and your spouse are on the same page, you may want to consider a DIY divorce. According to the Boston Law Collaborative, the average cost of a litigated divorce is more than $25,000. But with a flat-fee divorce, for example, you could spend as little as $300 plus court filing fees.
3. Review what your spouse reports. In some states, child and spousal support are based strictly on the income of both parties. Review carefully what your spouse reports financially to make sure it's accurate. This can make a huge difference in what you pay or get. Also, be honest in reporting your own finances; hiding funds or making huge purchases (perhaps to return later) are unethical moves during divorce that can cost you big time.
If you lie and get caught, you could find yourself liable for your spouse's attorney fees, the judge could fine you and, in extreme cases, you could go to jail. And don't be too sure that your spouse is above this sort of behavior. A report released by the National Endowment for Financial Education says that close to one-third of adults who had shared assets with a partner or spouse had lied about them.
4. Close joint credit accounts. If you have joint credit accounts, close them immediately. If not, you could be on the hook for your spouse's purchases even after your divorce is finalized. Also, remove your spouse as an authorized user on your individual accounts. If you remain an authorized user on one of your spouse's accounts, though, you are not liable for their purchases.
Make sure you change the password to all of your online accounts as well, so your spouse can no longer access them.
5. Create a personal budget. Separating households and going from two incomes to one, or even having to go back to work, will require adjustment. Your lifestyle will change, expenses may mount and it can be easy to let yourself fall into debt. Avoid making a bad situation worse by creating and sticking to a budget. Sit down and review your monthly bills and expenses.
Compare this to the amount of income you now expect to get and account for support payments that you are or soon will be paying out. If you can't afford all of your expenses, look for ways to reduce them. It's important to do things you enjoy during this time, but perform a cost-benefit analysis on each of your activities to determine if they're worth it.
Final thoughts: Divorce is a very personal experience, and it can be hard to remember in the midst of it that "this too shall pass."
When it's all said and done and you learn how to enjoy your post-divorce lifestyle, you will thank yourself for the steps you take now.
By David Bakke