Lecture Notes on Financial Advice During Separation/Divorce
Introduction
Tory is preparing for separation from her husband after 22 years of marriage.
Concerned about managing debt, specifically student loan debt.
General Advice
Seek Counseling: Even if the spouse is unwilling, it’s beneficial for one’s own emotional well-being and might provide clarity or even a wake-up call for the spouse.
Divorce as a Business Transaction: Emphasized that the emotional aspects are set aside, making it a strictly legal and financial matter.
Financial Advice for Managing Debts
Student Loans: They remain personal responsibility after separation.
Income Assessment: Tory's personal income is $50,000/year.
Hardship Deferral: Suggested deferring student loan payments due to financial hardship until stability is achieved.
Property and Assets
Home:
Worth: $200,000
Mortgage: $170,000
No significant equity
Cars:
Tory's car is paid for.
Husband’s car is not paid for but loan is solely in his name.
Credit and Banking
Credit Cards: Any jointly held credit cards should be closed immediately to prevent unwanted charges.
Bank Accounts: Ensure checking accounts are separated and not jointly held.
Other Debts: No other debts are jointly held except the mortgage.
Future Financial Planning
Housing: Tory cannot afford to keep the house on her income.
House must be refinanced to remove her name or be sold.
Debt Separation: Both parties keep debts tied to their own names (e.g., cars, credit cards, student loans).
Savings and Investments: Both have minimal savings in 401k.
Tory: $10,000
Husband: ~$5,000-$6,000
Legal and Financial Support
Alimony: Potential for alimony due to long marriage duration (22 years), especially given the income disparity ($50,000 vs. $90,000).
Representation: Importance of getting legal representation and preparing financially for legal costs.
Budgeting: Prepare for a minimalist lifestyle (cheap apartment, minimal expenses) to address debts and stabilize post-separation.
Emotional and Psychological Support
Counseling: Essential for navigating the separation emotionally and might help in reconciling if possible.
Pastoral Guidance: Seeking wise and godly counsel from a pastor or experienced marriage counselor for guidance on next steps.
Conclusion
Hope for Reconciliation: Emphasized the hope that Tory and her husband might turn things around with the right support.
Financial Prudence: Until the separation is finalized, focus on managing finances prudently and preparing for the future.
Final Thoughts
Encouragement to follow the channel for more advice and support.