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September 15, 2010
The Financial Challenges of Divorce
Even in a strong economy, divorce is often difficult and costly; but in a prolonged recession it can be financially devastating. For example, suppose that:
* Neither spouse can afford to buy out the other and you’re forced to sell the house or car at a loss — or even go into foreclosure.
* One of you has been unemployed for a prolonged period and you’ve run up major debt.
* You want joint child custody but can’t afford to set up a second household.
* One or both of you have difficulty finding independent, affordable health insurance.
* The retirement and investment accounts you’ve accumulated together and now must divide have lost significant value.
Even in an uncontested divorce, recovering from any of these scenarios would be difficult. But if your divorce is acrimonious, additional legal fees could leave you further in the hole.
Here are some important financial issues to consider when you separate:
Get good advice. Do-it-yourself divorce kits are widely available, but even couples with few assets who part amicably still need capable representation. That may mean hiring an attorney who specializes in divorce to at least review your paperwork and make sure you haven’t overlooked anything you might later regret.