4 Reasons to Avoid Making Big Purchases During a Divorce

When you’re going through a divorce, you’ve probably heard all about the “dos & don’ts”  necessary to ensure you have the best possible outcome from mediation or a trial. One of the most important don’ts during a divorce is making a big purchase.

There are four key reasons to hold off on buying a new car, splurging on jewelry, or making any other major purchase until your divorce has been resolved:

1. Marital Property Is Divided During a Divorce

Michigan isn’t a community property state, which means that shared assets aren’t always divided evenly. That being said, the courts will still usually look for an equitable division of assets.

If you take money out of a shared account and buy a new boat or an expensive pair of earrings, the court may take the cost of the purchase out of your share of retirement or savings accounts.

Worse yet, the court may force the sale of the item to divide the proceeds equally.

2. Your Loan Could Be Denied

Some lenders may look unfavorably at potential borrowers who are going through a divorce. Courts and divorces can be unpredictable, and a lender may not believe that you’ll have the means to repay a loan.

Lenders may wonder if you have to pay child support or alimony — or both — and so may view your application with that consideration. Alternatively, if your credit rating and disposable income are tied to your spouse’s, you may not be as attractive of a borrower when you’re newly single.

And if the bank does grant the loan, there is also the possibility that the court will later increase the support you have to pay, leaving you struggling to handle payments you can no longer afford.

3. You Might Be Stress-Spending

Divorce is stressful, and the pressure of the process, the thought of losing your children, or even losing your house may cause you to not think clearly.

Maybe that sporty convertible looks tempting, and with a new life on the horizon, you may feel like now’s the time to buy. Or perhaps you want to redecorate your home now that your ex-spouse has moved out, and you’re eyeing expensive furniture.

Whatever purchase you’re considering, it’s usually better to sleep on it and decide whether it’s truly something you can afford with changed financial circumstances.

4. Your Purchase Can Affect Alimony or Child Support

If you plan to make a case to the judge about why you can’t afford a certain amount of child support or alimony, the court may ask for financial disclosures. Or perhaps your soon-to-be ex-spouse asks for thorough financial statements during the discovery process of your divorce.

If you’ve recently made a large purchase or taken out a loan, the court may wonder if your spending is why you’re claiming you’re unable to provide the requested support.

Do You Need Help During a Divorce in Michigan?

Divorce can be a stressful and overwhelming process. That is why the family law attorneys of Gucciardo Family Law work to resolve your divorce as efficiently as possible, so you can dedicate your emotional and financial resources to where you need them most.

Contact Gucciardo Family Law today to discuss your case.