Most people see a divorce as an end. Why not see it as a new chapter? With our financial management tips, you’ll have a bright financial future. The possibilities are endless when you’re armed with knowledge. A credit provider like JustFund can help you stay financially healthy.
Budgeting for divorce
Divorce is a big change. A budget will help you move on and achieve your financial goals.
Managing funds during divorce
Expenses will go up during a divorce. On top of your everyday living costs, legal costs will come into play. The financial situation of divorcing parties may vary.
List your monthly expenses. Accounting for all of your expenses? That sounds like a lot. It doesn’t need to be difficult. Break them down into categories. What are your daily expenses? These are groceries, travel and other basics. Do you work or own a business? Work and business expenses can have important tax benefits.
Legal expenses
Legal fees are the next consideration. Court costs and lawyer fees are primary factors. Consider other expenses like fees for accountants and valuation experts.
A realistic monthly budget includes an emergency fund. Set aside enough for 3 months.
Update accounts
Start separating your finances from your ex. Close joint accounts and move your money to your savings or money market accounts. Consider closing joint credit cards as well.
Update insurance policies to reflect your new status. Review your utility accounts with your ex to determine how to pay bills.
Living arrangements
One of the biggest issues after separation is who gets to stay in the home. There are a few ways to handle this.
Living under the one roof. Cohabitation after separation is becoming more common. This can save money. It can also increase conflict. At JustFund, where possible, we don’t advise living under the one roof.
Solo occupant. One partner may find alternative accommodation. This depends on each person’s financial situation.
Spousal maintenance
Spousal maintenance is a lifeline. It helps manage debt and strengthens your finances. The Court can make a spousal maintenance order if the party satisfies:
They have reasonable needs.
They can’t support themselves.
The other party can support them.
The Court considers the following when determining maintenance payments:
Earning capacity.
Childcare responsibilities.
Age and health.
What is a reasonable standard of living.
Length of the relationship.
Instead of waiting for the property settlement to be finalised, the Court can make an interim spousal maintenance order. This is a temporary arrangement. The Court won’t go in-depth into the client’s finances to fast-track the support.
Spousal maintenance is usually paid in instalments. In some cases, the party may be paid a lump sum.
Shared assets
Some assets are shared in that they benefit both parties equally. These assets include joint accounts and the marital home.
Joint account
Both parties have a claim to all the money in a joint account. Each partner is entitled to a fair share of the marital assets. The Court will decide that share by looking at each partner’s contributions and future needs.
Protecting yourself
Both account holders having an equal claim to the money in a joint account raises concerns about how the money is used. What if one partner decides to transfer all the money to fund their spending habits? They technically can. But there are ways to stop this from happening.
Freeze the account. If you think your ex is going to siphon off the money and you can’t control it, you can ask the bank to freeze the account. Many banks will honour this request until you reach an agreement or get a court order.
Court-ordered closure. If the bank can’t freeze the account, the Court can order the account to be closed. The money can then be transferred to a trust held by your solicitor until your property settlement is finalised.
Court-ordered reinstatement. If your partner has taken the money from the account, you can apply to the Court to get the money back into the account. Alternatively, the Court may adjust the division of other assets to compensate.
Marital home
Both partners have a right to live in the marital home. Even if your name isn’t on the title, you can’t be forced to move out without a court order. You may apply for a sole occupancy order if you’re less financially secure. The Court will consider this order based on:
The children’s best interests.
Each party’s financial capacity.
Availability of other accommodation.
Each party’s conduct includes allegations of family violence.
Debt
Debt management is key to achieving your goals. For many couples, the biggest debt is a mortgage.
Mortgage
The parties listed as borrowers are liable for the mortgage. There are several scenarios to consider:
Refinance. Refinancing a mortgage is common in a divorce. One partner can then buy out the other’s interest in the home. This depends on their ability to service the loan.
Spouse defaults. Your partner may stop making repayments. If they’re a borrower, you shouldn’t be expected to repay them on your own. You can ask the Court to order them to make the payments.
Sell the home. If the mortgage repayments are too hard to manage, you can sell the home and split the profit. If you’ve owned the house for a long time, it may have a lot of equity.
Spousal misconduct
The law can protect you from a spouse who deliberately runs up debt. If you think your partner is trying to rig the property settlement, there are steps you can take.
Ask for disclosure
Both parties must disclose their finances for a property settlement. An experienced family lawyer and other professionals like a forensic accountant can help get your partner’s disclosure.
Track irresponsible spending
Record evidence of irresponsible spending. This could be gambling and luxury spending. Is your former spouse flexing their lifestyle on social media? This can work against them. These posts are prime evidence.
Start mediation
Mediation is a proven resolution method. Overall, it has an over 80% success rate. Ask your partner to fix financial issues amicably.
Apply for an urgent order
Get an urgent order. This stops your partner from disposing of assets and draining the asset pool.
Court action
The Court will look at evidence of financial misconduct. This can mean the offending partner has to take responsibility for certain debts and property adjustments in favour of the injured party.
Legal funding
Family law clients can get financing for their legal fees. JustFund is the most innovative. Here’s what we offer.
Expertise
We’re staffed by family lawyers who know the legal fee structures. That knowledge allows us to customise our funding for your case.
Flexibility
JustFund’s line of credit is not a personal loan. Funds are made available to the family law firm to draw down on as needed. This means all funding needs are covered.
Eligibility
Traditional lenders only care about a borrower’s ability to pay them back. Their decisions are based on a party’s financial position. JustFund wants to understand your situation. Our decisions are based on your case, not your income or credit score.
A client's perspective
Let’s hear from one of our clients:
Litigation at any level puts one's mettle to the test. This is particularly so when opting out of a life-long marriage, and where the husband actively prolongs the process in order to deplete your fighting fund. JustFund provided me with the surety needed to see my matter to a successful conclusion.
- Jason I
We hear similar stories from other clients. Leveraging superior financial resources is a known tactic. This can be scary. That’s why we began JustFund. You may feel that your situation is hopeless. It isn’t. We work every day to give our clients hope for the future.
Bottom line
Financial literacy is key to a successful divorce. A budget and access to good lawyers equals financial health after divorce. With JustFund, you’ll have stress-free access to the best family lawyers.
The staff are very nice and helpful and always keep customers informed. Easy application process in difficult times for people who need legal funds. I’m very thankful to JustFund and recommend everyone.
Apply for funding today.
