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Pay particular attention to the example given in the "How Long Will it Take to Pay off Your Balance" section.  Minimum payments will keep you indebted to the credit card companies for much of your life. 

Best bet, use your credit cards wisely… only for emergencies or if you know you can pay off the balance every month.  That way you can avoid the credit card crunch and pay yourself.  Just imagine what those minimum payments could be worth to you in retirement if you were able to invest that money for your future rather then having to pay it towards debt! 

Lisa C. Decker on protecting personal wealth from Divorce:

Divorce Saloon interviewed certified divorce financial analyst Lisa Decker who hails from Georgia but has an international practice. Lisa is extremely knowledgeable about money matters. In fact, her blog,   Divorce Money Matters,  is called just that.

We thought we would pick Lisa’s brain a little bit to get some clarity on certain money questions we or some of our readers may have.  Because while our team does consist of at least a couple of lawyers, Lisa makes a very good point that sometimes lawyers don’t know what they don’t know about the money side and in their files are a bunch of “ticking time bombs” with issues that should have been referred to finance professionals. Here is our interview with Lisa:

 

DIVORCE SALOON: Good Morning and Thank you for taking the time to speak with us

LISA DECKER: My honor and pleasure.  Thank you for inviting me.

DIVORCE SALOON: So we thought we wanted to get some information on how to handle money issues in a divorce and we understand that you are a certified divorce financial analyst. Can you please tell us exactly what a certified divorce financial analyst does?

LISA DECKER:  CDFA’s review and analyze all of the financial aspects of a divorce.  We work in pre-divorce situations with clients individually or in conjunction with their attorneys to devise financial strategies and scenarios that help them get their absolute best settlement.

DIVORCE SALOON: What attracted you to this line of work?

LISA DECKER: Throughout my lifetime, I’ve seen many friends and families go through divorce with lots of questions and not enough answers.  Many ended up financially devastated in the aftermath of their divorce.  Years later I found myself working in financial services and learned about this specialty field.  When I saw what a difference a CDFA can make in someone’s long-term future, I knew that I wanted to be able to help others with this expert knowledge.

DIVORCE SALOON: Based on your years of experience, do you see any emerging trends today in this field that are markedly different from years ago?

LISA DECKER:  I am seeing many more cases where folks are staying married for the time being because they can’t afford to divorce or live apart. The family home that was once coveted has now become in many cases the albatross in or out of divorce that no one wants or knows how to deal with because of the upside down equity. In addition, many more cases are dealing with debt and bankruptcy issues. Downward modifications of spousal and child support are increasing.

DIVORCE SALOON: What do you think is the reason for this change?

LISA DECKER:  Obviously the economic climate that we are all living with. Unemployment, fallen values in the home and retirement investments, rising debts are all contributing to the stress families are living under and living with.

DIVORCE SALOON: Why do you think that Money is such a hot button topic in divorce?

LISA DECKER:  When it comes to divorce you generally have two things to work out, the parenting plans if there are children, and the issues surrounding all matters of money.  Of course, there are all of the emotional aspects as well, but when you take those elements away the kids and the money are pretty much what divorce comes down to.

DIVORCE SALOON: Which asset, in your experience typically causes the most contention? And why do you think that is?

LISA DECKER:  Right now, I believe it is the family home.  Used to be that one partner, usually the wife, would fight to keep the home because of the emotions of it.  Now we are finding that both parties recognize the burden of the home and each are trying to pawn the home off on the other to be relieved of the burden in many cases.

DIVORCE SALOON: As far as wealth protection what is the main tip you would give someone in the following circumstances: 1) prior to marriage  2) during marriage  and 3) during the divorce process? Why does your answer change if it does?

LISA DECKER:  These answers will vary because different life circumstances will call for different plans of action.

Prior to marriage: Talk about your money styles.  Your past experiences, your spending and savings habits.  Lay it all out on the table, including showing each other your credit reports.  And if you have any separate property, like an inheritance, NEVER deposit those funds into a joint account or add your spouse’s name to your account.  This is a terrible mistake that usually cannot be undone.  When it comes to real estate the laws vary throughout the country, but I would suggest that you keep the property in your name only.  You may have to share some of the equity that grew during the marriage, but the initial amount that you started with may still be able to be accounted for and kept separate in the event of a divorce.  Again, this will vary greatly from state to state.  Find out your state laws BEFORE you get married so you know how to protect yourself if things unfortunately don’t work out!

 

During marriage: Get to know and always keep an eye on the money.  Both spouses should be involved and know where the money comes from and where it goes out as well.  I usually find that one partner is the one who managed the money issues during the marriage and the other was happy to be relieved of that burden and has no clue.  That becomes a serious problem if you are hit with a divorce out of the blue.  Always know where to find the documents of all accounts and have access to them.  And have credit cards in your own name.  Know that if you have joint accounts you will both be held liable for paying it back, even if your spouse is ordered to pay it in the divorce.  I believe if more couples would take a shared approach to spending and saving that there would be fewer problems in marriage with communication and money issues and possibly less divorces overall.

 

During divorce: If you are contemplating divorce or served with papers then you must become even more proactive and protect yourself.  Pre-planning can be your best weapon.  Consult with an attorney to learn your legal rights and a divorce financial planner to get an understanding of your particular money issues…then put a plan in place.  I suggest you do this before you ever approach your spouse if you are the one seeking divorce, or as soon as you are served papers if you are the one who is on the other side.  Too many times I’ve seen people stick their heads in the sand because they can’t or won’t deal with the fact that divorce is happening in their lives and they wait too long to get help.  SOME MISTAKES IN DIVORCE CANNOT BE UNDONE AND WILL BE LIVED WITH FOR A LIFETIME!

 

If you have joint credit cards or lines of credit, like an equity line, freeze those accounts (if your attorney advises) so that your spouse does not run up those items with massive debt.

DIVORCE SALOON: What is the hands down worse mistake a person going through divorce can make if asset protection is an issue and concern?

LISA DECKER:  Well, there is no easy answer to this because there are so many potential areas where you can run into problems in a divorce. In some cases I think relying on your attorney to figure out all of the financial aspects of your divorce can be a huge mistake, especially if you have complicated issues.  Attorneys are trained in the law and many times do not know what they do not know when it comes to the financial issues of divorce.  After doing a presentation for my local bar association I had one attorney say, “I have a lot of ticking time bombs in my file cabinets.”  Leave each expert to deal with their areas of expertise and combine those specialized areas for a truly powerful result.

 

I also think you must looking at the finances in a holistic way overall.  Understand that all assets are not created equal and what appears to be 50/50 may be anything but when tax considerations are looked at.   According to the Institute for Divorce Financial Analysts, the underlying tax basis is one of the most overlooked items by attorneys in divorce.  This can lead to a HUGE tax bill with Uncle Sam if not dealt with before the divorce is final.

DIVORCE SALOON: Do you recommend parties get accountants and tax specialists in addition to certified divorce financial analysts? Or does the work overlap a bit?

LISA DECKER:  CDFA’s must be practicing in the financial world for at least two years before they can apply and go through the certification process.  Many are financial planners, advisors and CPA’s already.  Since CDFA’s are trained in the tax issues of divorce they should be able to spot problems and if taxes are not already their specialty, then after they have done their initial analysis they would likely refer clients to someone who is.
DIVORCE SALOON: If you had to advise someone going through divorce about putting together a “divorce team” what would be your recommendation?

Get educated on the types of divorce options available and see what a good fit is for you.  Do you envision a civilized divorce?  Then maybe mediation, a review by a CDFA and having an attorney draw up the papers for an uncontested divorce works for you.   Do you feel that you are in for a duke-it-out type of contentious divorce?  Then start with a savvy attorney and add a CDFA to your team who will supplement your attorney’s strategies.  Maybe you desire something in between, then look at the Collaborative or Cooperative models – each side has an attorney and a coach (trained therapists) with one financial neutral making up the team that are all trained to help you get through the process in the best way possible.

 

A therapist is strongly recommended which ever approach you take.  A therapist can help you to deal with the emotional aspects so that you can make wise decisions and their hourly rates are usually lower than an attorney or financial advisors.

 

DIVORCE SALOON: What is the # 1 best money tip you can give to someone going through divorce?

LISA DECKER:  It’s simple, in or out of divorce, my tagline as Miss Money Matters™ says it all, “Mind Your Money Matters™”.  Don’t ever give up this responsibility to others.  Being proactive with your money matters will always keep you in a place of knowledge and empowerment over your lifetime.

DIVORCE SALOON: Thank you Ms. Decker for taking the time to speak with us. We hope our readers find your answers helpful.

LISA DECKER:  Thank you for all of your great questions and giving me the opportunity to share with your readers here at the Divorce Saloon.  I enjoy your posts and keep up the great work.  Now care to join me for a cocktail at the bar? J

 

 

 

Lisa C. Decker, CDFA™  is an expert in divorce financial matters.  As a discreet problem-solver and trusted advisor she guides clients to “Divorce Your Spouse, Not Your Money™.” Her soon-to-be-released eProgram Series – “The Secrets to a Sane, Savvy, Money-$aving Divorce” are filled with industry insider secrets to help guide you to keep more money in your own pocket when dealing with your spouse, your attorney and Uncle Sam! http://www.divorcemoneymatters.com/d/Save-Money-in-Divorce.

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Mr. Streitfeld,

I am writing regarding your article today, U.S. Housing Aid Winds Down, and Cities Worry.  I saw that you made reference to the home owner assistance programs through the government.  I wanted to share with you my experience in dealing with these agencies and lenders.

I am a CDFA (Certified Divorce Financial Analyst) and I have been trying to help several clients navigate the murky waters of divorce in a down real estate market.  

When the government announced the home owner assistance programs I was very excited to be able to offer a ray of hope for those buried under the debt of fallen housing values.  What I have found instead is a front and a farce with these programs.

Because the lenders can choose whether or not to participate these measures have no teeth.  I have yet to find one lender who is willing to participate and in my conversations with other professionals that deal with the same matters we are all finding the same thing - little to no participation from the lenders or servicers of the loans.

In essence, it appears that the homeowners have been offered hope, but really there is nothing behind the curtain when it is pulled back. The HUD counselors have no authority to make anything happen either.

I have called my Senators offices, Johnny Isakson and Saxby Chambliss (Ga.) and emailed the White House several times about this to no avail.  Not one of them has returned my phone calls or emails.

No one in the media is talking about this as I don’t believe many are aware.  I am trying to get the conversation going because I truly believe that the institutions that were bailed out when they needed help are now stalling in the hopes that the programs will simply run out of time before anyone realizes what is going on.

Please do a follow-up story on this as families are losing their homes while the stalling game is played.

Thank you for your time and attention.

Lisa C. Decker, CDFA
www.DivorceMoneyMatters.com

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I would love to hear your experiences with any of the government sponsored home owner assistance programs - HAMP,  HARP, H4H and their newest HAFA.  Please leave some comments below.  And be sure to contact your Congressmen, Senators and the White House to keep the pressure on to help the taxpayers who bailed out the big banks when they needed it!

Though this will not work for everyone, it does open up the mind to creative ideas.  If you are willing to thinking outside the box and truly sharing a child-centered divorce, then it is possible to come up with ideas that can make life easier for your children and even yourself!

I too, send my thoughts and prayers to our neighbors in the Caribbean.   At the age of 10, I survived a 6.8 magnitude earthquake in LA….I still remember what the devastion looks like.  It’s a shame that the poorest country in the western hemisphere has to be experiencing such sorrow.

Here’s a wonderful way I found to help many others around the world, including Haiti.  

http://tinyurl.com/HelpHaiti-HelpStopHunger

One small act, such wide-reaching results.  Touch lives with a click.  I hope you’ll join me!

Here are some divorce options you may not be aware of:

·         Pro-Se – Do it yourself.   May be ok for very simple cases (no real estate or other assets or debts, no children), but beware this can be riddled with problems.  Best to at least consult with a financial advisor and attorney before finalizing.

·         Pre-Divorce Financial Planning – Working with a CDFA or Divorce Financial Planner to work out the financial issues before filing for divorce can be very cost effective.  Once the financial and parenting issues (if there are any) are worked out then a couple can file as an uncontested divorce literally saving themselves thousands, if not tens of thousands, in legal fees.

·         Mediation – Mediators act as neutral parties to help couples craft their own agreements.  

·         Arbitration – Used only for particular areas of contention that couples can’t work out on their own.  Final and binding.  Not commonly used in divorce or the best way to go, but can be useful in some situations.

·         Collaborative Divorce – Uses a team concept – 2 attorneys, 2 coaches, 1 financial neutral and 1 child specialist, if needed.  Parties are not allowed to go to court.  There are pros and cons to this as well.

·         Cooperative Divorce – Similar to Collaborative, but parties leave open the option for going to court.  That may be a pro or a con.

·         Litigated Divorce – This is what most people think of when they hear the word divorce.  Knock down, duke it out in court types of divorces with very adversarial approaches.  With the right blend of attorneys on both sides, this may not be as costly.  With the wrong type of attorney on either side, this can be a money-sucker for both sides from the very start.

·         There  may be combinations of any among these.