Preparing to File for Divorce in the New Year

The end of the year is a time when many people in troubled marriages start thinking seriously about divorce. Getting through the holidays and making a fresh start for the New Year make January an appealing time to begin the divorce process. However, while you may wait until after the 1st to actually file, there's plenty of planning that can be done now that will make the process that much easier when new year arrives.

1. Know What You Owe

Make a complete list of all debts you and your spouse have--both separate and joint. Then, run your credit reports to make sure they match your list. If there are discrepancies, determine if the debt is a legitimate one that you forgot about or if there is an error or even possibly a fraud issue. If you determine that your spouse has obtained credit fraudulently in your name, it's better to know about it now and have it addressed in the divorce proceedings than find out months or even years down the road. You can access your credit reports from each of the three credit bureaus (Equifax, Experian, and TransUnion) completely free and instantly online by going to annualcreditreport.com.

Once you have a complete list of all debts, determine which spouse you think should be responsible for each.

2. Know What You Have

Take a full inventory of all property--both tangible and intangible, separate and marital/community. Many states require divorcing couples to provide financial affidavits detailing their debts and assets. Whether you hire an attorney or represent yourself in divorce, if you work on this now, you'll be ahead of the game when it comes time to file. Create a list broken down by categories. Here's a good starting point:

Real estate
Automobiles and other titled vehicles
Financial accounts (checking, savings, CDs, payable on death accounts, money market accounts)
Pensions and retirement accounts (IRA, 401k, profit sharing)
Stocks, securities and mutual funds
Business interests
Life insurance
Household goods and furnishings
Appliances and electronics
Jewelry
Art and other collectibles
Safe deposit boxes

Other things to include when compiling a list of your assets is their value, how much you owe on them, if anything, and whether you consider the property to be separate or community/marital property. Separate property is generally considered to be any property owned before the marriage, acquired during marriage by inheritance, gift to one spouse only, or represents the proceeds, other than lost wages, of a personal injury lawsuit. Community/marital property, on the other hand, generally refers to things acquired during the marriage. That being said, in amicable divorces where the parties can agree to a reasonable and fair split of assets, the distinction between separate and community/marital property is not usually important.

Once you have a complete list of your assets, make a note of which spouse you think should receive each item.

3. Gather and Organize Important Documents

Not only will you need many of these documents at some point in your divorce proceedings, keep in mind that an angry spouse may try to take important papers hostage or even destroy them entirely during a breakup. It's far easier to assemble these documents now and put them in a safe place than to have to replace them or scramble to find them later. Make copies of everything so that your spouse can also have copies. You can decide later who is the best person to be in possession of any original or certified copies of documents. You may want to begin with the list of documents below.

Real estate documents (mortgages, home equity loans, deeds)
Vehicle titles and loan papers
Estate planning papers (wills, financial and medical powers of attorney, advance medical directives/living wills)
State and federal tax returns
Insurance documents (medical, dental, vision, life, home, automobile)
Birth and marriage certificates
Social Security cards
Passports
Paystubs and other proof of income (SSI, SSD, public assistance, business records)
Investment records (stocks, bonds, CDs, account statements)
Records from other court cases (child support orders, custody/parenting time, bankruptcy, other lawsuits)

4. Have a Realistic Picture of What You Can Afford

Knowing what you can and can't afford is sage advice at any stage in your life, but if you're anticipating getting a divorce after the holidays, failing to have realistic goals for yourself in relation to your budget could be disastrous. For example, while you may dream of making this last Christmas as a couple the best one ever for your kids, in the long run, you've only harmed them if you rack up credit card bills that you'll struggle to pay later. Instead, consider paring down your gift list, at least for this year, and spend more quality time together. Minimizing tension between you and your soon-to-be-ex is one of the greatest gifts you can ever give to your children.

If you don't already have a detailed budget, make one. Having an idea in your head of what you pay out every month is one thing, but actually having it all laid out on paper is the best way to have a complete picture of your financial situation. Remember to include expenses that are either non-recurring or are paid less often than monthly. Here's a place to begin:

Utilities (electric, gas, water/sewer, phones, trash, cable, internet)
Cleaning/maintenance/lawn/snow removal
Food (groceries, dining out, lunches for children)
Transportation (vehicle maintenance, loans, gas, public transportation)
Clothing
Personal care (hair, nails, etc.)
Child care
School supplies and extracurricular activities
Insurance (auto, life, health, disability, home)
Educational expenses (tuition, books, fees, student loans)
Health care (physicians, dentists, vision, prescriptions)
Entertainment
Pets (food, veterinary bills)
Holiday expenses (gifts, decorating, food, transportation)

How much will child support be?

Every state has its own income-based formula, commonly referred to as child support guidelines, for determining how much money one parent should pay to the other for the support and care of their minor children. The state legislatures have gone to great lengths to take every reasonable factor into consideration in arriving at these calculations, and for the most part, judges have a strong preference for using the guideline amount. That being said, all states allow judges to order a higher or lower support amount if necessary for the best interests of the children. When spouses agree to the deviation, judges are more likely to go along with that agreement. Keep in mind though that agreeing to a support amount that is much lower than the guideline amount or choosing no support at all may draw greater scrutiny from your judge.

More information on how child support is calculated in your state is available here.

Will one of you need spousal support?

In most uncontested divorces, especially those where the parties don't hire attorneys, no spousal support is awarded. For example, DivorceWriter.com determined that less than 10% of customers include spousal support in their divorces. If you aren't sure whether spousal support is appropriate in your case, note that several states have adopted income-based formulas for determining if and how much spousal support should be awarded. Typically though, if the parties agree to spousal support, they don't use any particular formula, but rather reach an agreement on the amount and duration of support based on their situation. When awarded, spousal support is often monthly payments for a set period of time, but a lump sum payment is also attractive when the payor spouse has access to a large amount of cash.

Can you afford to live apart?

Usually, when couples decide to divorce one of the first goals is for one of them to move out. However, this can be a problem since the expense of maintaining separate households doesn't usually coincide with an increase in the income of either party. Depending on the circumstances, expenses for housing, utilities and food may double, which is why for some couples, continuing to live under the same roof is simply a necessity. If you are in a position for one of you to move out, in most instances neither party should expect to enjoy the same lifestyle, at least not at the outset.

If you and your spouse must continue cohabitating after deciding to divorce, make sure the grounds in your state don't prohibit this. In a few states, to get a no-fault divorce, the spouses must live physically apart at separate residences for a set amount of time either before filing for divorce or before the divorce can be finalized. More information on states with physical separation requirements for divorce is available here.

How much will the divorce itself cost?

Even in the simplest of divorces in the cheapest divorce states, you should expect to spend at least $2,000.00 between the attorneys' fees and divorce filing fee. In bigger cities, attorneys' fees in uncontested divorces can easily exceed $5,000.

You may want to consider representing yourself without an attorney. In uncontested divorces where the parties can reach an agreement on financial matters and the details of child support and custody when minor children are involved, getting a divorce is little more than a matter of filing the right paperwork at the right time. For more information on creating your own state-specific divorce papers and representing yourself in divorce without an attorney, visit DivorceWriter.com.

Should we consider filing for bankruptcy?

Couples that decide to divorce sometimes find that they need to file for bankruptcy in order to get a fresh start for one or both of them. If you have financial problems, you should make an appointment to speak to an attorney in your state that specializes in bankruptcy law. When you're anticipating divorce, the timing of the bankruptcy filing is important. For example, if you need to file a joint bankruptcy so that both spouses can discharge some or all of their debts, you will need to postpone your divorce until the bankruptcy is complete.

Additionally, settlement agreements aren't binding on your creditors so while a joint debt may be allocated to one spouse in the divorce, creditors have the right to seek payment from either or both spouses on joint debts unless you discharge the debt in bankruptcy or pay it in full. Also keep in mind that divorce settlement agreements cannot be discharged in bankruptcy. One of the worst things that can happen is for a spouse to agree to take on certain debts in the divorce agreement only to discover later that he or she simply cannot afford them. Because settlement agreements cannot be discharged in bankruptcy, that spouse will remain stuck with these bills. For these reasons, a joint bankruptcy filing before the divorce may be very advantageous for both spouses.

5. Ask Yourself if Divorce is the Best Way to Achieve Your Goals

The most common reason people give for wanting to get divorced is being unhappy, and often people assume that the marriage is the main problem. It's just easier to blame your spouse's inadequacies for your unhappiness than considering what you need to do to find joy and contentment in your life. Sometimes, it isn't until years (and possibly more divorces) down the road that people hold themselves accountable for the role they played in the demise of their relationships. Before filing for divorce, invest at little time in regular counseling.

If your dissatisfaction with your relationship is related to disagreements over parenting styles, be sure to ask yourself this: Is what I dislike about my spouse's parenting of our children going to get better or worse if we divorce? If you view your spouse as too lenient or too strict with your children, be aware that those tendencies are often more exaggerated if you divorce. If your spouse isn't taking an active enough role in the upbringing of the children, will living apart make them more involved or even more removed? When a couple is working on domestic issues with the goal of remaining married, spouses have far greater incentive to meet each other in the middle with parenting...and pretty much everything else.