Should You Make Installment Payments Part of Your Alabama Divorce Settlement?
It’s never easy to arrive at what feels like a fair division of assets in a divorce. On top of battles over alimony and spouses’ contribution to the couple’s financial state, there is the difficulty of splitting seemingly un-splittable items or investment accounts. For instance, many large assets can’t be divided equally without being liquidated, which could detract substantially from their value. Having one spouse buy out the other spouse’s share in the asset may be a solution, but what if neither spouse has the cash on hand to do so? Another situation is when the spouse with smaller financial resources holds primary residential custody and wants to keep the family home for the children’s stability, but lacks the cash to purchase their ex’s share of the home.
Divorce settlement agreements may address these issues by including a provision that one spouse buy out the other through installment payments. These agreements can work painlessly for some former couples, but they can be extremely problematic for others. Before entering into an installment plan with an ex, take time to consider the potential consequences of acting as a lender to your former spouse. Read on for a list of features that should be in place before entering such an agreement, and contact an Alabama divorce attorney for additional guidance.
Your ex can afford the payments and is responsible with money.
There’s a reason that banks conduct extensive credit and reference checks before agreeing to lend large sums of money to someone; a person’s history of money management and employment often foreshadows their future behavior. If your spouse has historically had problems managing their money responsibly, or has been unable to find steady work, you may want to rethink becoming their lender.
You won’t be in serious financial trouble if they fail to make regular payments.
If the payments that your ex would be making to you will provide supplemental income, but nothing critical to your financial stability, then an installment plan might not be a bad idea. If, however, you would be dependent on those payments and have reason to believe that your spouse may not make these payments reliably, then don’t invite additional anxiety about money into your life by entering an agreement for installment payments with your ex.
You’ve gotten the agreement in writing, and you’re prepared to enforce it in court.
Above all, you need to be sure that you have an installment agreement in writing, and that the writing was drafted by an attorney you trust. Before entering that sort of agreement, however, make sure that you’re mentally prepared to enforce it in court if your spouse doesn’t uphold their side of the bargain. Litigation is stressful, time-consuming and expensive, and you may choose to avoid it at any cost.
If you’re facing a divorce in Alabama and want to be sure that you have an attorney on your side who will fight for your rights in a split, contact a dedicated and professional Guntersville family law attorney at The Hawkins Law Firm for a consultation at 256-502-4444.