Understanding the most common divorce issues will help you if you ever go through one.
Many people struggle with divorce because it requires them to give up a lot of things that they own. Aside from losing their spouse, someone that’s going through a divorce must figure out how they’ll split their assets and share the debt.
Divorce and money are two things that couples don’t want to think about, but money is one of the main things people are concerned within a divorce. Because of the many possibilities, knowing how couples resolve their issues during a divorce is crucial.
Keep on reading to learn more about three common divorce issues.
Table of Contents
1. Dividing Property
One of the first things you’ll have to decide when going through a divorce is how you’ll divide your property.
Dividing property isn’t an easy task because there’s a good chance that both you and your partner have things that you’d mutually like to keep. However, state law or court-orders can determine who gets what.
For example, some states are considered community property states, which have laws the force couple to equally divide assets. The problem with this is that it can cause one partner to lose some of their assets although the other partner had nothing to do with them.
Aside from the laws in community property states, several routes can be taken to divide marital property. In most cases, couples will figure out among themselves who will get certain things. Should there be a disagreement, you do a few methods to decide who gets what.
One of the most common things that couples do in a divorce is barter, which is letting a spouse take certain items while exchanging something else. For example, a wife can take the car while the husband keeps the boat. They can also sell their marital property and equally split the proceeds.
It’s important to research the laws in your state so that you can prepare yourself if you have to divide the property. If you happen to be in a community property state, the process will be much simpler because they already have laws in place.
Understanding how property is divided during separation will prevent you from getting the short end of the stick. Property is something that many divorcees struggle with, so start planning accordingly.
If both you and your spouse’s names are on the deed as owners of your house, you’ll have to do what’s known as a divorce home buyout. This is when you pay your spouse’s portion of the mortgage to remove their name from the deed.
2. Dividing Debts
Aside from property, debt is another one of the main things that divorcees struggle to deal with. In many cases, deciding who will be left with the debt is a much more difficult process than dividing the property. Financial responsibility during separation will prevent you from having to pay your spouse’s debt.
The best way to go about this is to get a credit report. While you may have records of your loans, a credit report is the only way to see exactly how much you owe and to whom. Credit reports will also include all of the joint accounts that you have with your spouse.
After you’ve gotten your credit report, scan through it and figure out what debt is shared and what’s only in your spouse’s name. Immediately after identifying these, prevent the debt from growing any larger by getting rid of joint credit cards. However, keep your personal credit cards for emergencies.
The next thing to do is to start determining who will be responsible for the debt. If possible, you can pay the debts off now so that you don’t have to worry about them in the future. The only downside to this is that you may have to pay it yourself if your partner isn’t willing to help.
You can also barter with your partner and agree to take responsibility for some of the debt if you can get more assets. Ultimately, it’s best to mutually agree to share responsibility for the debts. No matter what, you’ll still be responsible to pay off the debt if your spouse refuses to because you’re a co-signer.
3. Tax Issues
While couples get caught up in the division of property and debt, most people don’t think about the tax issues in a divorce. One of the things often overlooked in divorce agreements is that you’ll have to determine who gets a tax exemption for dependents.
Dependents are anyone that you financially take care of (for most couples, children). When filing taxes, couples can keep more money if they have dependents in their household. This is something that will need to be discussed with your partner and a divorce lawyer.
In some cases, the parent that spends the least time with a child won’t be able to claim them as a dependent.
Now You’re Aware of Several Divorce Issues
Divorce isn’t something to take lightly as it involves losing a lot. Providing that you know what to do if you ever go through a divorce, you’ll be able to keep most of the things that you want. You’ll also avoid having to pay a lot of money on court fees because you’ll know how to handle most situations.
If you’re going through a divorce, start looking into whether your state is a community property state. After that, get a credit report so that you can see what debt you share with your spouse. From there, you should be able to resolve your divorce issues.
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