Are you going through a divorce and also thinking about making a big purchase?
Splurging on unnecessary luxury items during a family law case is not a good idea under the best of economic conditions, and it is one of the worst decisions you can make when inflation is reaching record levels and some worry that a recession is coming. In fact, this is frequently cited as one of the biggest and most common mistakes guys make during divorce.
Here are four reasons why your big purchase could be a big mistake.
Will It Belong To You?
Wouldn’t it be terrible to go out and buy that new home, car or boat, then find out that half of it belongs to your spouse?
The laws on what is considered “marital property” — and thus property of both spouses — varies from state to state. But the bottom line is clear: If you make a purchase before you’re legally divorced, it might be your wife’s property, too.
If you must buy something big during your divorce, there are agreements you can enter into with your spouse that will ensure that what you buy belongs solely to you. Just make sure you have a family law attorney. These agreements are complicated, and you’ll have to have all your i’s dotted and t’s crossed.
Loans Can Be Tricky
You’ll probably need to get a loan to make your big purchase, and a divorce can make this really complicated.
For example, if you’re buying a house while you’re still married, then your spouse may be required to sign the mortgage contract.
And because your financial situation is in limbo, it may be tough to get a loan at all. Lenders know that you soon may be ordered to pay child support or alimony or that your bank account may be divided. That makes lending to you risky.
But it might be even worse if they actually give you the loan. If the court suddenly orders you to make large payments to your spouse, then you could end up underwater.
You Might Not Be Thinking Straight
In the time crunch of a divorce, you may rush into a purchase without thinking it through. In the effort to start your life over and redefine yourself, you may buy something that you’ll regret later.
So sit back, reflect, and if you must buy something, run it by someone you can trust first.
How Will It Look To The Court?
If you’re in a dispute over child support or alimony, a big purchase could decrease your chances of winning.
How can you or your family law attorney tell the court that you can’t afford to make monthly alimony payments when you just bought a fancy new boat or car?
That’s right, you can’t.