Filing for divorce is the easy part. Untangling the financial mess and reaching a final agreement on the financial aspects can be the difficult part. In Michigan, financial issues must be resolved before the divorce can be finalized. How do we get started?
KNOW YOUR FACTS
Before getting started, you will need to know how much you owe and to whom. Make a list of your creditors, with the respective balances. And, it’s wise for each party to request a copy of their credit report so that no debt is missed during the discussion of debt division.
Once you know who you owe and how much you owe, talk to each other to discuss how you will continue paying these debts during the pendency of the divorce. And also agree that no further unnecessary debt will be incurred while the divorce is pending.
HOW ARE WE GOING TO UNTANGLE OUR FINANCES?
If you and your spouse have savings, or will have equity from the sale of your marital home, consider using these assets to pay off or pay down your marital debt. This is the easiest way for both parties – you leave the marriage with the least amount of debt possible and each of you can start fresh.
The parties can also agree that one person will take more of the marital debt in exchange for:
- Receiving more assets.
- Paying less in spousal support.
- If one person is retaining the marital home, paying less to the other party for their share of the equity in the marital home.
HOW CAN WE RESOLVE FINANCIAL ISSUES WITHOUT LITIGATION?
The parties can come to an agreement regarding their debt and assets, or the judge can be the final decider. Most parties want to maintain control of the outcome, as well as avoid costly and time-consuming litigation. So, how can we resolve financial issues without litigation?
A neutral, third-party, trained family mediator can assist couples in creating their own agreement regarding debt and assets. Mediators remain neutral, and do not make decisions for the parties. They assist the parties in getting to a mutually agreeable resolution. Once the parties have come to an agreement, the mediator will draft a mediation agreement. The terms of that agreement are binding in court.
In the collaborative divorce process, the parties resolve their issues in a respectful manner, using a team approach. The team assists the parties in crafting solutions in the best interest of each party, without involving the judge to make their final decisions. In the collaborative divorce process, the parties, their respective attorneys and a coach meet in a group setting. An agenda is set for each meeting, to assist the team to stay on track. These meetings are designed to encourage the sharing of ideas and settlement options. The goal is to reach an agreement on the financial aspects and obtain a binding written agreement.
To conclude, even tough it may be difficult to work with each other amidst the divorce, understand that you share a common goal. That goal is to leave the marriage with the least amount of debt owed as possible. With this is mind, it may be easier to remain cooperative and make smart financial decisions for the benefit of your post-divorce life.
EXPERIENCED DIVORCE ATTORNEY
At Schmitt Law, PLLC, we are here for you each step of the way in your divorce. From planning your first steps, to approaching your separation, to helping you understand your rights, to signing the final documents. We can help you navigate the separation and divorce process. To get started today, book a consultation online or by calling Schmitt Law, PLLC at (616) 608-4634. Whenever you are ready, we are here for you.