Financial Alternatives for an Affordable Divorce
While divorce is, in most instances, emotionally difficult and draining, the process doesn't have to completely wreck the finances of both parties. There's no question that dividing your assets and debts will be complex, even if you and your soon-to-be ex-spouse don't rank among the wealthy. Even so, if you both are willing to maintain a cool head and some emotional distance, there are options for keeping more money in your pockets (and less in your attorneys' hands).
If you're interested in finding alternative ways to keep the cost of your divorce at a minimum, there are options available. To help you get started with investigating these options, we've gathered some basic information below. Bear in mind, though, that divorce law varies from state to state, so be sure to verify the specific laws in your state of residence before you begin any negotiations.
Do-It-Yourself Divorce
This simple approach works well for couples with minimal shared assets and no custody disputes. Free legal documents, forms and instructions are easily found online. Once you've both arrived at an agreement, you can legally file for the divorce yourselves. One word of caution, however – don't agree to this approach if you're feeling pressured to sign off on a settlement that makes you uncomfortable.
Mediation
Mediation is another relatively simple method for coming up with a workable divorce settlement. The mediation process involves both parties coming together, with the guidance of a professional mediator, to work out the details of their settlement. The difference in cost between a mediated divorce and a divorce that goes to trial can be massive. Mediated divorces can also lower the emotional cost of conflict that a typical divorce can encourage. Be aware, though, that if one of you has a significantly larger income than the other, or if you suspect that your spouse is hiding some assets, mediation may not be the most effective approach. You also have to be prepared to maintain a certain level of civility, so if you can't imagine sitting across the table from this person and remaining calm, you may want to consider another option.
Collaborative Divorce
Collaborative divorce is similar to mediation, but differs in that each party hires his or her own attorney for the process. Other types of professionals, like financial advisors and therapists, will often be part of the process as well. All parties involved agree to work together to create an agreement that is as fair as possible to both halves of the divorcing couple. This approach is becoming more and more popular, especially for couples with children who know that they will have to maintain some sort of relationship. The costs involved with collaborative divorce, while sometimes higher than mediation, still tend to be less than the typical divorce.
Collaborative divorce is a relatively new approach to divorce settlement, so if this option sounds interesting, do your research before hiring an attorney to represent you. An overly aggressive attorney can defeat even the best efforts of any divorcing couple.
No matter what you decide, be sure to make your best choice for your long-term emotional and financial well-being. For more information about how to manage your finances during a divorce, read our Prepare Yourself for a Money-Smart Divorce page.
