Creating the Liquidity Needed to Finalize Your Divorce Settlement

The time from final determination of asset assignment to the receipt of those funds can be quite some time. In fact, if there are a substantial amount of assets, for each party to receive his or her just share of the marital assets it may be necessary for one of the parties to obtain cash through liquidation in order to settle the asset distribution with the other spouse. For instance if the wife receives the marital home in the divorce settlement she will need to generate cash in order to buy out her husband's interest. The same may be true of other assets such as vacation homes, timeshares, motor vehicles and even household goods. Your divorce lawyer can provide you with more detailed information on these issues.

If you find it necessary to generate some cash flow in order to finalize your divorce settlement, there are several options you may wish to consider although some are better suited to the situation than others. Some of the most common ways to obtain the cash you need to make good on your divorce settlement include the following:

• Evenly distribute any remaining funds in joint checking and savings accounts
• Liquidate all liquid and near liquid assets such as checking, savings, CDs, cash on hand, coin collections and bonds and securities
• In order to distribute the marital assets pertaining to the family home you can refinance the property in order to obtain the cash you need to buy your spouse's interest and thus retain the home in your own name
• Research the possibility of borrowing against your 401K Plan. While the government sets regulations regarding withdrawals and loans, it's possible you may be able to borrow against it if there is real property involved
• Get a loan from your bank

While the last two options may not offer the best solutions, they are certainly available if you need them and have no other way to generate liquidity. During the distribution phase of your divorce it is necessary for all marital property to be distributed in accordance with the court order; this means you must use any means necessary to fulfill your obligation in the process. While there can sometimes be an extreme delay in the finalization of real property such as when the court determines the custodial parent can continue to live in the marital home until the minor children are of legal age, it is essential to make sure all marital property is distributed as quickly as possible.

Your divorce lawyer will be able to help you determine what divorce steps you must take in order to ascertain a quick and equitable distribution of all assets. The property settlement is usually always the longest of the ancillaries to reach finalization, but if you prepare in advance it will take less time. Determine what you must do and begin the process right away especially if you think there is a possibility it will take some time. For instance, if you need to obtain a mortgage in your own name it may take several weeks to complete—more if you are looking to obtain a government-insured mortgage. Keep all of these factors in mind as you begin to negotiate the terms of your divorce settlement.