How Rising Inflation Can Affect Your Long Island, NY Divorce
Since the COVID-19 pandemic, the prices of consumer goods have steadily risen to an all-time high. To say we all get sticker shock at the checkout counter is at best an understatement. Social media users are coining the phenomenon the “Silent Depression,” suggesting that the purchasing power of the average citizen has never been lower, yet few seem to be talking about it.
Families dealing with divorce have arguably felt the pinch of inflation the hardest. Those receiving child or spousal support are feeling the strain, while those paying it may be having a harder time paying it. Everyone considering a divorce is wondering how they’re going to afford the legal process. Here’s what to know about how increasing inflation could impact your Long Island, NY divorce and what Hornberger Verbitsky, P.C. can do to help.
As Inflation Goes Up, the Value of Your Divorce Settlement Goes Down
When a divorcing couple reaches a settlement agreement, this is usually based on what their finances were at the time they separated. But when inflation rises and the purchasing power of your dollar goes down, so does the value of your divorce settlement and the assets you were awarded.
If you’re currently negotiating a settlement with your spouse or plan to do so in the future, be sure to account for inflation and the potential reduction of your settlement value years from now before reaching an agreement.
You Could Have Trouble Making Alimony or Child Support Payments
Even though the price of housing, fuel, and groceries have risen exponentially, your wages may have remained stagnant for years. This means that your money doesn’t go as far as it used to and you may find yourself having to make sacrifices just to keep food on the table for you and your children.
If you struggle to make child or spousal support payments during this time, you’re not alone. Many divorced spouses and single parents are having a hard time keeping rent and utilities paid and there’s just not enough money left over for support. But it’s risky business to miss court-ordered payments – you could be held in contempt of court or have your wages garnished if you do.
You’ll Pay More for a New Home
The cost of housing post-pandemic is higher than it ever has been, with mediocre and damaged homes going for upwards of $300,000 or even half a million dollars in some popular locations. As dodgy landlords let properties fall into disrepair to artificially impact supply and demand, livable homes become more and more unaffordable.
If you plan on buying or renting a home after your divorce, you could have a lot more difficulty than you did when you first got married. You may want to consider staying with another family member or having roommates to offset the radically high cost of living, at least temporarily until you can get more resources.
You May Take on Debt After Your Divorce
Affording expensive divorce litigation when the economy is already in shambles is no small feat. Many families take out loans or credit cards to help them manage the costs of dissolving their marriages, but this unfortunately leaves people in a lot of debt once the divorce is finalized.
In fact, Debt.com reports that as many as 59% of spouses owed money after their divorces. Here’s how that number breaks down:
- 37% of respondents took on < $1,000 of debt
- 22% of respondents took on $1,000 to $5,000 of debt
- 18% of respondents took on $5,000 to $10,000 of debt
- 11% of respondents took on $10,000 to $15,000 of debt
- 12% of respondents took on $15,000 to $20,000 of debt
Unless you have a lot of money put back in savings to afford your divorce, chances are you’ll need to borrow to be able to finalize your divorce, particularly if it’s a contested or contentious divorce. If that happens, make sure you factor this into your settlement and make sure you’re getting enough to compensate for the payments you’ll need to make on your divorce debt.
How Hornberger Verbitsky, P.C. Can Help Control Inflation’s Effect on Your Divorce
At Hornberger Verbitsky, P.C., our experienced legal team understands the ins and outs of how inflation can affect a divorce and we’re here to help guide you through the process of dissolving your marriage successfully. Contact us today for a free initial consultation and case evaluation to discuss your case by dialing 631-923-1910 or by sending us a quick message online through the short form on this page.
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