1. Gather copies of tax returns;
2. Gather copies of financial statements;
3. Gather copies of insurance policies (whether they are term or whole life policies with a cash value and if they have a cash value, what it currently is).
4. Inventories of property in the house – using a video camera to record a walk-through of the house is a great way to do this to make sure you don’t forget anything.
5. Inventories of property in safe-deposit boxes (though you should take a witness with you to (1) verify what is in there when you went and (2) verify that you did not remove anything from the box)
6. Retirement account statements.
7. Appraisals of real estate and personal property like jewelry, art, etc.
8. Copies of paystubs for you and your spouse for the year-to-date

Of course all of this information can theoretically be gathered in the discovery phase of your divorce litigation you can save a lot of time and a lot of money (on attorney fees) by having all of this information pulled together from the beginning.  Not only will you save yourself money on attorney fees, but you put yourself and your attorney in a better position when it comes to negotiating prior to and arguing at a temporary hearing.

Another thing that will come of this information is that the more your specific knowledge your attorney has about your case the better he/she will be able to advise you about the likely outcomes or the best courses of action for you with less assumption.

Hat tip to the Ohio Family Law Blog for the tips in this post from their post 12 Proactive Steps to Take If You are Contemplating Divorce.

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Going through tough financial times increases tension within the family and interferes with your relationship with your children and your spouse. Don’t let the situation make you feel cut off from your family.

Parenting is all about teaching your children. Share financial issues with your children much as you can, depending on their age. Opening up the lines of communication will not only keep you connected to them, but may also provide an opportunity to teach them about finances.

When you first realize you are in over your head and can’t make your payments, contact your creditors and try to negotiate repayment plans with you.  Unfortunately, this is easier said than done.

If you can’t restructure your debts, you should explore bankruptcy to relieve your financial stress.  Bankruptcy was designed to help individuals stabilize their finances and get out from under their financial burden by protecting their property, lowering their stress levels, and allowing them to sleep at night.

Keep in mind that filing bankruptcy is not the problem. The problem is not being able to pay your bills and not being able to provide for your family. This financial pressure causes the stress and anxiety to build. All this spills over into your family relationships.

To decide whether bankruptcy is right for you, contact an experienced bankruptcy lawyer who can help you navigate the complicated bankruptcy process and advise you about whether Chapter 7 (“straight bankruptcy”) or Chapter 13 (“reorganization bankruptcy”) is best for you.

Once you have gone through the bankruptcy process, rejoice in new beginnings. You went through bankruptcy to get to a fresh start. Now, begin by developing a sound financial plan that will protect your finances and your sanity. Establish a savings plan that will allow you to better absorb financial strain and plan for your family’s future. Once your present situation is under control, you can begin to look to the future and set aside money for your financial goals.

But What If I’m Getting a Divorce?

Sometimes divorce is inevitable.  I practiced family law for ten years, so I know that debt not only can cause divorce but can also cause divorce proceedings to be more difficult than they would otherwise be.

She says he spent too much.  He says she spent too much.  And neither can afford the credit card payments.  The divorce case can come to standstill over debt.

If that’s the case, both spouses should consider bankruptcy.  Getting rid of debt means one less thing to fight over, and that’s a good thing for your divorce case.

If you are married, you can file a joint bankruptcy case with your spouse.  Depending on your situation, you may even be able to use the same bankruptcy lawyer to do this.  Much hinges on whether there is any conflict of interest in having the same attorney represent you in your bankruptcy case—and that depends on the facts of your case.

By using bankruptcy to get your financial house in order, you can reduce your stress, enjoy time with your family, and free up your mind to start planning for your future.

Russell A. DeMott is a Charleston, South Carolina bankruptcy lawyer.

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