Divorce is a major life event that brings both emotional and financial challenges. Before taking this significant step, it is essential to have a clear understanding of your financial situation. With legal fees and changes in financial circumstances, preparation is critical to maintaining stability later on.
1. Assessing debts and assets
Start by taking stock of all your assets and liabilities. This includes bank accounts, retirement funds, real estate, and other valuable possessions. List all debts such as mortgages, credit card balances, and loans.
In Illinois, the court follows the principle of equitable distribution, which means assets and debts will face fair division, though not necessarily equally. A comprehensive list will help you understand what is at stake and prepare for negotiations.
2. Separating your finances
Before filing for divorce, it is wise to start separating your finances from your spouse’s. Open individual bank accounts and begin redirecting your income into these accounts. Review joint accounts and consider closing or freezing them to prevent any unexpected withdrawals. Separating finances can help establish financial independence and provide a clearer picture of your financial standing.
3. Budget post-divorce
Think about what your financial life will look like after the divorce. Create a budget that reflects your anticipated income and expenses. Consider costs such as housing, utilities, groceries, and any child-related expenses. Having a clear budget can help you plan for your future and maintain your living standard. It will also give you a realistic view of what financial support you might need or be able to offer.
Financially preparing for the future
Addressing these financial issues before filing for divorce can provide a solid foundation for the proceedings. If you find yourself overwhelmed, you may reach out to a financial advisor or a legal professional. They can offer guidance tailored to your situation, helping you make informed decisions and move forward with confidence.