Going through a divorce is always stressful, but divorcing during an economic downturn can be even more challenging. When the economy is struggling, everything feels so much more tenuous—especially if you’re going through a significant life change.
However, a New York divorce online doesn’t have to mean financial ruin, even during a recession. By using divorce mediation and planning ahead, you can help protect yourself when divorcing in a bad economy. Use these tips to maintain control over your finances during this stressful time and prevent unnecessary financial problems down the road.
Work with a Mediator to Avoid Divorce Fees
Working with a lawyer and going to court can be both expensive and exceptionally stressful. If the price adds more anxiety than a lawyer can soothe, you may want to consider working with a mediator instead. Mediation is a good option for couples who want to avoid excessive conflict and costly legal fees.
During mediation, a neutral third-party participant will facilitate talks between you and your spouse to reach an agreement that works for both parties. If the parties cannot reach an understanding through mediation, then their case would proceed through court proceedings as usual.
In addition to saving money, mediation provides another benefit: it allows divorcing spouses to move on from their marriage faster than if litigation was involved. It can take months for a court to legalize divorce, and each state has its own requirements for waiting periods and length of residency. With mediation, you can often settle matters faster and with less stress than in a traditional court.
Try a Legal Separation Instead
Another option for couples who want to divorce is a legal separation. This is not a full divorce, but it does allow you to separate from your spouse legally and get some of the same benefits and protections of divorce without the legal drama.
There are many reasons why couples choose this option over divorce. For example, some people want to test out how their separation would affect them before going through with an official divorce. A legal separation can help you better understand your financial situation before making such a big decision, too.
With a legal separation, you can decide on important matters like child custody and support, debt obligations, and the dividing of assets and proceed with your separate lives. Then, when the economy rebounds, you can move forward with finalizing the negotiations and divorcing legally.
Know Your Assets and Their Value
To best protect yourself, it’s crucial to have copies of all your account statements so you can track what assets you have and how much they’re worth. What is the value of your home? What is the value of any business you own? What are the current values of your investments, retirement accounts, and life insurance policies? If you don’t know these things, contact a financial advisor to help. Keep note of what percentage of the asset each person owns as well.
Expect your Income to Dip After your Divorce Is Finalized
After you get divorced, your income may decrease. After all, going from two incomes to one might be devastating on your lifestyle. Our advice? Try to prepare in advance by creating a budget based on your income and necessary expenses. Account for all income, including jobs, child support, and spousal support. You may have to cut back on expenses or downsize to make ends meet until you adjust to your new financial situation.
Consider Sharing Assets That May Take a Financial Hit
Just because you’re getting divorced, it doesn’t mean you have to get rid of all your shared assets right away. If you’re worried about selling an asset during a market downturn, consider holding on to it together until it’s a better time to sell. This asset could be a house, investment portfolio, or a shared business. If you sell during a recession, you’ll both end up with less money in the end. If you can agree to hold onto the asset in the short term, you can avoid taking a financial hit. While this may not always be feasible (as running a business with your ex can be stressful), it may be the best choice in some circumstances.
Renegotiate in the Future
Remember: the terms of your divorce aren’t set in stone. Some elements can be renegotiated in the future. Alimony and child support payments are two of the most common factors that are renegotiated when situations change for one or both parties.
If your or your spouse’s financial situation changes and you want to renegotiate, there’s no reason not to. As long as some amount of support is part of the original divorce settlement agreement, you can renegotiate and change the amount later if your or your spouse’s earnings change after the recession. A family law mediation specialist can help you handle this process peacefully and cost-effectively.
Work With the Right Team
When the economy is tough, it’s tempting to focus on the short term. If you don’t plan for the long term and make smart decisions about your financial needs, you may soon find yourself in a bad position. One of the best ways to protect your personal and financial interests during a divorce is by working with the right team of divorce mediation providers or lawyers. They can help protect you and your family to ensure you get what you need in the divorce settlement agreement to start your new life on the right foot.
Divorce is a complicated undertaking, and it’s even harder to navigate when the economy is down. But with a little planning and the right divorce mediation team by your side, you can make sure that your assets are protected and that your family will be taken care of. The most important thing is to get yourself as prepared as possible before embarking on this journey— and if you do so, both parties will have an easier time making decisions that benefit everyone involved in the long run!
For additional guidance on New York divorce online or family law mediation, reach out to one of our experts today!
