As if divorce isn’t hard enough emotionally, then you get hit with the financial side of divorce. Establishing your own credit, setting up your own independent accounts, closing joint accounts, etc… can be grueling, but unfortunately a very necessary part of starting your single life.
The Financial Side of Divorce
Before you’re able to move forward from your ex, you’ll need to take some steps to create your own financial footing. Below we outline some steps you’ll want to take.
Divorce means a rebalancing of your budget, and it really is “your” budget and yours alone. While some expenses may disappear, others will become your sole responsibility. If you are not receiving alimony, you will no longer have the benefit of a secondary income to ease the debt.
Spousal support, more commonly known as alimony, payments are ongoing, periodic payments made from one spouse to another under a legal separation or divorce order issued by the court. Spousal support is intended to help an economically disadvantaged (or lower-earning) spouse continue to enjoy a similar standard of living after he or she is divorced. In most cases in Los Angeles, the spouse who earns a higher income is ordered by the court to pay alimony to the other spouse, though whether you are entitled to alimony in California divorce proceedings depends on a number of factors, including: your earning capacity, the length of your marriage and any documented history of domestic violence between you and your spouse. There are two types of spousal support in California:
- Temporary spousal support – Set at your initial hearing and paid until a complete agreement is reached, or until a Final Order of Divorce is entered
- Permanent spousal support– Paid for an indefinite period of time in an amount that can be modified later, if and when the financial circumstances of either spouse change
If You Do Not Receive Spousal Support
If you are not receiving spousal support you may find you take a huge financial hit that can affect your credit. To avoid this hit, or rather, to mitigate it, you’ll want to make a list of all of your expenses. These expenses should include any car or house payments that you’ll be solely responsible for following the divorce. Next, take a look at your income. You’ll need to compare your income to the expenses and see where you net out.
It might be a good idea to look at this income to expense ratio prior to filing. This may determine if you want to file for spousal support.
How to File for Spousal Support in Los Angeles
California is a no-fault divorce state, which means the spouse asking for the divorce does not have to prove that the other spouse did something wrong; he or she must simply state that due to “irreconcilable differences,” the couple cannot get along. Similarly, under California Family Code § 4320, marital misconduct carries no weight when establishing the payment of alimony or spousal support after divorce. Spousal support is not intended to punish a spouse for misbehavior, nor it is meant as a reward for a spouse having endured mistreatment at the hands of his or her wife or husband during the marriage. The sole consideration for spousal support in Los Angeles is financial in nature, to ensure that both spouses can maintain a standard of living after divorce that is close to the standard established during the marriage.
To file for spousal support in Los Angeles, the party requesting the payment must ask the judge to make a spousal support order, and this order must be issued as part of either a divorce or legal separation, or as part of a domestic violence restraining order. You can either ask that the alimony be paid while the case is going on (temporary spousal support) or once the divorce or legal separation becomes final, as part of the court judgment (permanent spousal support). Under California law, spousal support payments are automatically terminated upon the death or remarriage of the supported party. In some cases, the spousal support agreements can be changed, if the spouse making the payments suffers a significant financial hardship, or if the spouse receiving the payments suddenly requires less support.
How an Experienced Los Angeles Alimony Attorney Can Help
Divorce and spousal support cases in Los Angeles can be complicated, especially when emotions are running high and both parties are feeling exposed and financially vulnerable. Our attorneys at Divorce Lawyers Los Angeles often encourage divorced or divorcing couples to attempt to reach a workable and amicable alimony payment agreement on their own outside of court, as negotiation and settlement are almost always preferable to going to trial. However, we want what’s best for you and your family, and we will stand by your side every step of the way, whether you end up going to court or not. One thing to keep in mind if your case does go to trial is that the judge has a great deal of discretion when deciding on spousal support payments. This is why it is so important to have a thorough understanding of the factors the judge will consider when deciding how much alimony you will receive or pay. An experienced family law attorney can help you understand the complexities of your spousal support agreement, help you calculate alimony payments and prepare the forms required by the court, among other things.
It’s also a good idea to look at your credit reports to see what your personal financial standing looks like. Creditors will use these reports to asses whether or not to give you a loan. Review these reports very carefully to ensure that there are no errors. This report will be able to give you an idea of what to expect as you try to establish new credit on your own.
Close Joint Accounts
Divorce doesn’t relieve you of any joint debts you and your ex incurred during the course of the marriage. Any joint accounts that you have with your spouse will still have your name on them, and thus will impact your credit score. That means a creditor can come after you if your spouse falls behind on a payment – even if you have a verbal agreement with your spouse.
Close all joint accounts as soon as possible and have everything that you are responsible for re-financed under your name. For joint credit cards, you should be able to transfer the balance to a new card so that you can close the joint card that the two of you shared.
Until all of your joint accounts have been closed, it’s crucial that you continue to make at least the minimum payment on all of those bills each month. You do not want any lapses of payment in your credit report. If your ex agrees to make the payments, follow up to ensure they did. A single late payment can drop your credit score by anywhere from 60 to 80 points, according to FICO data, assuming an initial credit score of 680. Though the effect on your credit will diminish over time as your more recent payment history takes precedence, that late payment can stay on your credit report for up to seven years.
Establish Your Own Credit
If you already had an established credit history before you got married, or if you were a joint account holder on your spouse’s accounts, you probably won’t have any trouble obtaining credit in your own name, provided your previous credit history was good. If this is not the case, you might need a few months to establish yourself as a responsible payer in the eyes of creditors.
You can do this by opening a credit card and using it responsibly.
You can also sign up for a secured credit card. These require a security deposit, but your on-time payments are reported to the credit bureaus every month, so consistently paying on time will raise your credit score as if you were using an ordinary card.
Side Note: Changing Your Name
If you’re thinking about changing your name back, do this before you open any new credit accounts so that they will be listed in your new legal name. Additionally, you should get in contact with the institutions where you have existing financial accounts and notify them of the name change so they can update their records.
How to File for Divorce in California
California is a no-fault divorce state, which means that either party in a marriage has the right to file for divorce for no other reason than “irreconcilable differences,” and property settlements in CA divorce cases are not influenced by the behavior of either spouse, although child custody and visitation rights can be. Under California Family Code § 2320, in order for a judge to grant a divorce in California, one of the spouses must have been a resident of the state for six months, and in most cases, the individual seeking divorce must file in his or her county of residence, where he or she must have lived for at least three months. Once the divorce papers have been filed, California law dictates that the filing party must wait at least six months from the date the other spouse received the paperwork before the divorce can be finalized.
How an Experienced Divorce Lawyer Can Help
Not all divorce cases in California go to court. In some cases, couples can resolve their divorce disputes through negotiation or mediation, during which an attorney can make sure your best interests are being represented. Too often, couples filing for divorce believe they can handle the proceedings on their own and end up making a bigger mess of their situation than they started with. While we do encourage spouses filing for divorce to reach an agreement outside of court and try to avoid divorce litigation altogether, especially when children are involved, our experienced Los Angeles divorce attorneys can assist with every aspect of the divorce process and will aggressively represent your case before a judge if it comes to that. Whatever the circumstances surrounding your case, we still stand by your side and ensure that your legal rights are protected throughout the process.
For more information about California divorce law and the divorce process, contact Divorce Lawyers Los Angeles for a risk-free initial consultation. Our main goal as divorce attorneys is to help you evaluate your options under California law and make informed decisions that protect your interests and legal rights. Don’t wait to get help, call our Los Angeles legal team today at (213) 550-4600.
Divorce Lawyers Los Angeles
5455 Wilshire Blvd
Los Angeles, CA 90036
Phone: (213) 550-4600