## The Financial Challenges of Divorce Amid Economic Volatility
The peak seasons for divorce filings, according to multiple legal experts and research studies, are March and August, highlighting the current period as a time many couples grapple with the emotional and financial strains of divorce. The challenge of navigating financial matters during a divorce is further complicated in the current volatile economic climate.
### Divorce in a Volatile Economy
The year 2023 has been marked by financial volatility, with shifts in the stock market, cooling home prices, and the erosion of purchasing power leaving couples uncertain on how to divide assets. In this climate, a strategic, flexible, and compassionate approach is needed, according to real estate brokers, accountants, and divorce attorneys. While it’s not possible to completely protect your divorce proceedings from the economy, there are several steps that can help mitigate its impact.
### Selling the Family Home During a Divorce
For many Americans, their wealth is tied to their home. However, the current fall in housing prices, especially in some regions, is a considerable challenge. Jaime Davis, a divorce attorney in Raleigh, North Carolina, suggests that couples should include conditions in their separation agreement specifying when and how much to lower the house’s price if it doesn’t sell. Other experts underscore the importance of a quick sale as divorce proceedings can become increasingly contentious over time.
### Refinancing Your Mortgage
While it is currently less expensive to buy out a spouse in order to keep the family home, the process of refinancing a mortgage can be a hurdle. Credit rating agency Experian notes that removing a co-signer from a mortgage generally requires paying off the loan in full or refinancing. Divorce attorney Scott Trout has highlighted the rising cost of refinancing due to increasing interest rates.
### Valuing Personal Assets
During a divorce, it’s crucial to accurately value personal assets. Former head of the Appraisers Association of America, Victor Weiner, urges individuals to thoroughly check all areas of their home for potential valuables.
### Dividing Financial Assets
Emotions often run high when dividing assets acquired during a marriage, especially in an unstable economy. However, Scott Trout advises that it’s better to divorce when the bulk of assets are at their lowest value.
### Navigating the Gig Economy
The rise of irregular income through independent-contractor work and “side hustles” has complicated divorce settlements. As the pandemic has disrupted traditional income patterns, it’s important for divorcing individuals to plan for a range of potential earnings.
### Managing Debt and Student Loans
Debt incurred prior to a marriage is usually owned separately and then jointly afterward. When it comes to student loans, courts typically assign the responsibility for payments to the spouse who incurred them. However, this is not always the case, and the final decision can be influenced by several factors.
### Budgeting for Layoffs and the Future
Given the volatility of certain industries, experts suggest considering potential layoffs when planning for a divorce. If job loss or income reduction is likely, it may be worth delaying divorce proceedings if possible.
In conclusion, navigating a divorce requires strategic financial planning, especially in volatile economic times. Couples are advised to seek professional advice and consider all possible scenarios to ensure the best possible outcome.
Original Story at www.cnn.com – 2023-08-19 21:03:00