Seven Big Post-Divorce Money Mistakes Women Make
The Seven Big Post-Divorce Money Mistakes Women Make
Breaking up is not only hard to do, it can be brutal on your finances.
Legal fees and creating and running two households from one are just the initial costs of separation process. And while some expenditure is necessary, others can be emotionally charged and careless and can lead to serious debt.
Here are seven common ways divorced couples can get into big financial trouble after a split:
While a divorce Settlement Agreement may specify who is to pay what account, it carries little weight with creditors.
The most frequent mistake of all after divorce is assuming that because the ex spouse has been the one ordered to pay back the debt in the divorce, they are off the hook for it. Most people do not realise that courts do not have the authority to make creditors abide by a judge’s orders in divorce. A spouse may have recourse to re-claim a debt from the other spouse who assumed the debt, but it does not nullify liability towards the creditor where the debt was a joint debt of the parties.
If you relied on the other person’s income during the marriage, your cash flow may take a serious dip. As it constricts, so must your budget. Unfortunately, many who are accustomed to abundance deny reality and continue to shop till they drop. The bills, however, wind up on the cards.
The most important thing most parents want is for their child’s lifestyle to continue, be conscious of your current circumstances and spend accordingly.
Own a home together? Make sure that your share in the property is transferred, especially if you are married in community of property. There are many cases where one party was awarded the other spouse’s share in the home, but neglected to transfer it. If your ex lands in financial trouble after divorce, creditors may still attach his/her share in the property, so make sure it is transferred.
Wanting to ruin your ex by charging up the cards is a frequent response to betrayal; it is what one call ‘the saboteur spouse’. Squelch this desire, though. While big balances may result in the hoped-for fury, you too could be held responsible for the balance.
If you’ve been dumped for a younger model and want to make yourself feel better by looking better with the hope of attracting a new mate, you may be considering splurging on a beautification procedure.
Be careful, though it usually translates into little more than added liabilities. Some people spend thousands on plastic surgery after discovering the husband’s affair. It may be money that one could not afford to spend, it was more important to paying off credit cards. Worse, those nips and tucks normally has no positive impact on the soon-to-be ex. Delay any major decisions — financial and cosmetic — for at least six months to a year after a divorce is finalized.
What happens when one parent can afford more and better things for the children post-separation? The less wealthy partner sometimes attempts to keep up with or even outdo the other.
Oftentimes, there is a pre-divorce battle for the children’s love and affection by purchasing gifts for kids or taking them to concerts or cruises in order to gain their affection over the other spouse. Question your motivation for purchasing certain items for the kids. If it’s to prove your love, stash the cards.
7. New love
Getting sucked into a fresh romance when a marriage falls apart can be seductive. It can also be pricey. One of the most common post-divorce credit issues are loans people make for new partners. In some cases, it may be thousands to fix a broken car, but in others, it is tens of thousands to help a new lover with a business, or hundreds of thousands to put towards an ‘investment’ that was really a scam. Avoid lending or giving money to anyone for at least a year after divorce.
Almost everyone has regrets about a broken relationship. Don’t make needless, emotion-based liabilities one of them. Divorce your mate, not common sense.
About the author:
Bertus Preller is a Divorce and Family Law Attorney based in Cape Town and has more than 20 years experience in most sectors of the law and 13 years as a practicing attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. and litigates in divorce matters across the country. He is also the Family Law expert on Health24.com and on the expert panel of Law24.com and is frequently quoted on Family Law issues in newspapers such as the Sunday Times and Business Times. His clients include celebrities, actors and actresses, sportsmen and sportswomen, television presenters and various high net worth individuals. His areas of expertise are Divorce Law, Family Law, International Divorce Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, digital rights, media law and criminal law.
Bertus other passion is technology and he also co-pioneered the development of technology in which the first book in the world was delivered to a mobile phone utilizing sms and java technology and also advised a number of South African book publishers on the Google Book settlement class action and negotiated contracts with the likes of Google and Amazon.com.