Going through a divorce can be an emotionally wrenching time. Unfortunately, it is also a time when spouses need to make some important financial decisions that may affect them for years to come. Some of the most important financial decisions arise in the property division process.
In Colorado, marital property is subject to equitable division between the spouses. In most cases spouses negotiate the property division and then submit it to the judge, who then enters an order based on the parties’ agreement. If the parties cannot agree, the judge makes the decisions.
One of the serious mistakes a spouse can make is to make a major concession in the property division in order to get custody of the children or greater visitation rights. The problem with this is that the property division is generally only done once, and then it’s final. Custody and visitation, on the other hand, can be modified months or years down the road. The court will often take a more active role in decisions involving children, and is obligated to put the best interests of the child first.
Another serious mistake is failing to reach agreement as to joint unsecured debts, including credit card debts. Ideally, as much of the balances as possible should be paid off before the divorce is final. If that is not possible, a spouse should make sure the property settlement includes provisions as to who is responsible for paying off each debt. If the property settlement fails to adequately address joint debt issues, a creditor may be able to come after one spouse for the entire amount.
Source: Time, “The 7 Biggest Money Mistakes That Divorcing Women Make,” Lili A. Vasileff, July 9, 2014
