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Catherine New

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Getting A Divorce Saved My Finances

Posted: 08/07/2012 11:51 am

My parents, twice-divorced each, had four words of advice for me when I told them I was ending my two-year marriage: Get a good lawyer.

Like a lot of Americans, I couldn't even come up with $500 in emergency money when the time came to split. Just the opposite. I was nearly $20,000 in credit card debt and $15,000 in student loan debt. I also earned much less than my ex-husband. Financial manageability was not exactly my strong suit when I got married. Could I really afford to get divorced?

But when you are in stage five relationship decay, the price you're willing to pay to end the suffering is limitless. I took my parents' advice and looked for a lawyer. You know, someone like Glenn Close in Damages. In reality, what I could afford was closer to John Laroquette in Night Court. I called a few listed on the Internet; they were not impressed with the stakes. There were no kids and only minor assets, and a quibble over jewelry that was a wedding present.

Mom insisted on an attorney who had at least a nameplate on the door. In the end, the cost for the attorney who was recommended was $6,500. Cash up front, no credit cards.

Trying to find an estimate on how much a divorce costs is like trying get an average price for an airplane ticket: it all depends on what kind of baggage you're taking with you. The cheapest divorces -- "Divorcios Rapidos" -- are around $650 after all the fees and paperwork. Other ballpark figures put an average figure at around $15,000 to $30,000 for lawyers and related filing costs. And it just goes up from there.

Indeed, it has become so expensive -- and divorce so prevalent -- that a whole cottage industry of lending specifically for splitting up has emerged over the last decade.

To finance mine my first thought was: Sell the ring. Norman, the diamond dealer in midtown Manhattan who had seen me only three years earlier, offered me a slug of Scotch from a bottle he kept under the counter and told me to go home and think about it.

"You can use it for next time," he said. "We'll add a few more stones!"

I considered pawning it but the bullet-proof glass was too much for my tattered emotions. I kept the ring and decided to take a loan instead. My options were: take out a credit card advance at 29 percent interest or humble myself and ask my parents.

Financially speaking, the damage from a divorce extends far beyond the lawyer fees. It means going from a two-income household to one income to pay rent and utility bills and other household costs. It's no coincidence that when the recession hit, the divorce rate plummeted in the United States.

Retirement savings took on new importance as I considered the possibility that I might be supporting myself alone for many years to come. I lost a financial and psychological safety net. And then there is the loss of health insurance, shared credit and debt, tax benefits, and many other financial benefits that come with marriage.

For me, my divorce became object lesson in austerity: Gone was cable TV, the membership to a yoga studio, dinners at restaurants, travel, new clothes and other remnants from my married life. Now, I was too single to fail.

After a teary negotiation session with two lawyers and my ex, my attorney gave me another dose of financial reality. "You are so lucky to get divorced. Do you know how many women are living in misery because they can't afford to leave?"

Gratitude was not exactly my go-to emotion during the process. But I knew she was right. I am lucky: I have a job; I have health insurance; and I have a family who was willing to help in an emergency.

But my gratitude goes further than that: Marriage doesn't have to be a lifeline for financial stability. Yet for many women, it is still a primary economic building block.

For me, it was the end of my marriage that actually became the pathway to a better economic reality. My forced cost-cutting helped get me out of debt and stop using credit cards; I started to contribute to my 401(k); and I learned how to live on a much smaller budget and build my own savings safety net. I repaid my parents for the loan they extended me. I became truly self-sufficient for the first time and I stopped relying on cheap credit or other people to pay for my life.

As I left my lawyer's office not long ago, she gave me a final piece of advice: Next time get a prenup.

 

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My parents, twice-divorced each, had four words of advice for me when I told them I was ending my two-year marriage: Get a good lawyer. Like a lot of Americans, I couldn't even come up with $500 in ...
My parents, twice-divorced each, had four words of advice for me when I told them I was ending my two-year marriage: Get a good lawyer. Like a lot of Americans, I couldn't even come up with $500 in ...
 
 
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07:13 PM on 10/04/2012
Best part of this story is that you learned and figured it out, on your own.
I got divorced this year after 9 years, and although the primary reason for me to finally agree to a divorce was trust (repeating hidden financial issues and being thrown under a bus behind my back), the secondary reason was money. When problems are hidden and I don't find out for months (through a credit report or a hidden PO box where the bills and collections letters to me for unpaid medical bills were going) I had no choice, especially I was prescribed anxiety medicine for the first time in my life. I should have seen it coming when she got a credit card under MY name 3 years into our marriage and had the bills sent to my in-laws. I don't know why I kept on thinking things will get figured out - although, why wouldn't we trust a spouse?
Unfortunately, we have 3 young kids. I miss them terribly - but I try to see them every weekend (not every other weekend like the most common "standard") - and I'm sad to think how this will affect them, especially since they are so young. I hate the fact that they will grow up thinking this is "normal" family - but I hope one day they can realize I had no other choice for my own sanity.
My latest advice to people getting married includes getting a prenup and keeping financial accounts separate.
06:05 AM on 08/12/2012
Divorce would definitely help save your finances if you know how to handle your money well. Not all divorcees made a fortune out of it some of them just throw money and end put being bankrupt. http://womensdivorcelawreview.com
10:30 AM on 08/11/2012
Getting a divorce definitely helped my finances, but not in the same way as this author. I was married for 10 years. When we got married he had a great job, then for some reason he quit (I never did figure out why) and thereafter was either under employed or unemployed. He had not job at all for the last four years. He was also a drug addict, alcoholic and adulterer. We were going to lose our house so I didn't even pay the mortgage for the last year of our marriage and we still had no money left at the end of the week! Now that I am divorced, even though I am paying rent which is equal to what the mortgage was, I am able to put money in the bank, pay my bills and have money left before the next payday because I don't have to support someone and their evil habits. Yeah, I know so many people will say (and I've heard it a million times!) "You shouldn't be financing his addictions". Well, try living with someone who has an addiction problem and you are their only means of support. They will steal and pawn (my) things, anything to get money. Its insane!
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02:11 AM on 08/10/2012
Wow! I clicked on Catherine New at the top of the page next to her smiling and so happy photo. What a liar. All this woman reports on is money, money and more money. Poor Catherine New and her monetarily focused and monetarily driven life. Can we move on now from the more and more poor Catherine New.
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11:44 PM on 08/09/2012
Imagine the conversations, "I want to take yoga, I want to eat at a restaurant, I want to travel, I want to get a new outfit, why do we only have twelve channels?"

A relationship goes both ways with things like this. Not me, me, me.

This is a spoiled brat acting like, well, a spoiled brat.
12:36 PM on 08/09/2012
What someone claims about themself: "Financial manageability was not exactly my strong suit ."

Translation: "I don't even have the math skills of a 2nd grader and I have even less common sense, but I know how to hand someone my credit card."
Mochilero
Have backpack, will travel
11:07 PM on 08/08/2012
We did our own paperwork at the end of our twenty year marrige, uncontested, $125 in court costs. This story reminds me of the movie War Games - which do you prefer Thermonuclear War or a simple game of chess.
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Michael Morrison
Proud Dad, Engineer, Aspring Geophysicist
10:08 PM on 08/08/2012
With $35,000 in debt, what, exactly, did you have that was worth a $6,500 attorney?

It's still possible to get a No Fault divorce for $200.
04:14 AM on 08/09/2012
Could they possibly have the items they were in debt for paying for?

Seriously, think.
08:45 PM on 08/08/2012
What happened to being able to screw the husband over??? Men should pay the price of divorce. I'm all for equality, but not the part about women being financially miserable.
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07:22 PM on 08/08/2012
Lawyers are "greedy" and make "obscene profits", and they don't even help with people's health!

It's a good thing that the ALA (affordable legal act) was passed!
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Durt Bagg
I know dirt.
07:22 PM on 08/08/2012
If you don't have kids and can agree to split what you bought as a couple then a legal aid will do just fine... but when kids are large estates are involved the only way to proceed is with a lawyer.
06:31 PM on 08/08/2012
I've not suffered through divorce (yet), but I have been heavily in debt, lost my job, and if it weren't for family & a good friend, would be living under a bridge to this day. Now i'm debt free, steady work with an emergency fund socked away.

What I'm trying to say is, "I didn't build that," I had help and was granted opportunities.
06:19 PM on 08/08/2012
Guess what? You don't have to get a divorce to go on the austerity plan, and relationships that aren't financially responsible are vastly more likely to fail. Looks like you tried to write an article recommending divorce, and ended up with the strongest possible argument for getting your finances in order and making every dollar work for you. You didn't need the divorce to get out of credit card debt and end your bad habits... although apparently you needed to need it to overcome your own momentum towards stupidity.

Instead of taking your lawyer's parting advice, how about forging a relationship that will last before getting married?
10:27 AM on 08/09/2012
Apparently her 2 Year marriage was just too much to bear. Being in Stage 5 collapse and all...
Great example of what is now being refered to as a "Starter Marriage". These types of women are an embarrassment, and need to seriously grow up.
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Anaxamenes
It's not how big your micro-bio is...
05:13 PM on 08/08/2012
So what you are saying is that you both could have saved $6,500 each by realizing it wasn't working and trying your hardest to have an amicable breakup?
04:57 PM on 08/08/2012
Someone explain to me how a pre-nup would have helped this situation?
10:30 AM on 08/09/2012
She would have been more able to go after spousal support.
Just Lawyer BS telling a woman that "next time, plan to look after yourself with his money, since you're obviously too immature to know what COMMITMENT actually is.
11:50 AM on 08/09/2012
Don't most pre-nups actually separate the husband's and wife's money *more*?