Divorce Without a Financial Settlement

By Mike Broemmel

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Divorce laws in most states require the resolution of financial issues before a court enters a final divorce decree. You and your spouse must either sign a marital settlement agreement or a hearing or trial is conducted to resolve financial issues. Some states allow what is called a bifurcated process, a legal term meaning that the laws permit a termination of the marriage before resolving financial issues.

Financial Issues When Filing for Divorce

Although laws vary, in most jurisdictions, you and your spouse must file a financial affidavit, sometimes called a domestic relations affidavit or other name, either when a divorce is filed or fairly soon afterwards. The affidavit provides the court and your spouse essential information pertaining to financial matters. The data is used both in settlement negotiations and as a guide for the judge should the case require a hearing or trial regarding financial issues.

Leeway in an Uncontested Divorce

Courts typically allow couples greater leeway in an uncontested divorce when it comes to resolving financial issues. Courts encourage a divorcing couple to resolve issues themselves, without the need for a divorce trial. This includes using the services of a mediator. The court does review the settlement agreement reached by a couple in an uncontested divorce to ensure that it is fair to both parties.

Delaying Financial Settlement

A few states, such as California, permit a two-step process called a "bifurcated" divorce, in which a couple is divorced before financial matters are addressed. These issues must then be resolved at a later date. At least one state, North Carolina, allows you to divorce without addressing financial issues at all, but if you don't reserve the right to do so before the divorce is final, you forever waive your right to go back and ask the court to divide property or debts or address issues of spousal support later. The couple must advise the court, typically through the petition, response or a motion, that certain financial matters remain unresolved. Taking this step is called "preserving the issue." By preserving the issue, the court holds future hearings after the divorce to resolve these matters.

Pros and Cons

Both pros and cons exist with regard to delaying a financial settlement. You can typically end your marriage faster, especially if your finances are especially complicated. On the negative side, once the divorce is granted, other issues might remain unresolved for an extended period of time. In some cases, once a couple's marriage ends, the two might feel free to move on with their lives and the pressure to resolve other issues decreases, which can cause delays.