What is a Financial Affidavit and Why is it Important?

financial affidavit

What is a Financial Affidavit and Why is it Important?

If you’ve filed a claim for alimony, post-separation support, or child support in North Carolina, the court may ask you to fill out a financial affidavit. This article is meant to help explain what it is, why it’s important, and how to fill it out.

What Is a financial affidavit?

In its simplest form, a financial affidavit is a written budget. It includes an itemized list of your average monthly income and expenses. It’s also a sworn statement. Once you’ve completed it, you’ll sign it in front of a notary and swear under oath everything in the affidavit is true and accurate.

The point of a financial affidavit is to summarize your monthly income and expenses in a few simple pages so that the judge and other party can easily see exactly what you believe your financial situation to be. Don’t worry—if your county requires financial affidavits, the other party will have to fill one out as well and you’ll get to review it. Exchanging affidavits and submitting them to the court during trial can help streamline and expedite the litigation process; saving you and the other party time and money.

To see an example of what a financial affidavit looks like, click here to access the Wake County domestic court financial affidavit.

Why is it important?

Several North Carolina courts use financial affidavits in domestic court. They’re specifically used in spousal support cases but can sometimes be used in child support cases as well. As previously mentioned, judges review both parties’ financial affidavits to determine their income and expenses. Judges want to know if the dependent spouse’s expenses exceed their income. Likewise, they want to know if the supporting spouse has the ability to pay the dependent spouse spousal support. If the dependent spouse doesn’t have a need, or the need is less than what the dependent spouse previously stated, it will significantly affect the case. Similarly, if the supporting spouse doesn’t have the ability to pay, it could affect the outcome of the case.

Judges often heavily lean on financial affidavits in spousal support cases. In some counties, judges determine post-separation support (basically temporary alimony) based on affidavits alone—without the parties presenting any testimony or other kinds evidence. For these reasons, it’s a key piece of evidence. It’s extremely important for you to make your affidavit as accurate as possible. Both the judge and the other party’s attorney will scrutinize it thoroughly. If enough of the expenses are called into question, the judge may decide your affidavit—or even your testimony—isn’t credible. For example, if you say in your affidavit that you spend $2400 in rent each month but it comes out during cross-examination that you actually spend only $1600, it’s likely the Judge will see that as a red flag and be less inclined to believe the rest of your affidavit.

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How do I fill it out?

Imagine you’re completing a very detailed budget. If you’re like most Americans, taking an in-depth look at your finances can be stressful. Make sure to complete the affidavit over the course of several days–working on it in hour chunks and giving yourself plenty of breaks along the way.

Step 1: Gather your financial documents: Gather between 3 ­– 6 months’ worth of bank and credit card statements. Wake County requires you to fill out your income and expenses from prior to the date of separation as well as your current income and expenses (after the date of separation). If your county does the same, you’ll need to gather 3 – 6 months’ worth of bank and credit card statements from prior to the date of separation.

Step 2: Categorize all income and expenses: This is the part most people hate but hang in there. It’s tedious to go through your financial statements but it’s vital for turning in an accurate affidavit.

The purpose of this step is to mark each item on your statement, so you know what category it belongs to. One way to do it is to use multiple colored highlighters. Know which color means which category and mark each expense accordingly. Don’t be afraid to mark up your statement, it will help in the long run.

Note: the financial affidavit has multiple categories to help provide the judge with clarity. For instance, a lot of people lump all their utilities together when they create a budget and call it “utilities.” But your financial affidavit will likely ask you to make distinctions between each kind so the judge knows exactly what you’re paying for what. So make sure you distinguish between your gas, electric, water, garbage, phone, etc.

Step 3: Calculate the average monthly amount: Now that you have all of your income and expenses from the past 3 – 6 months, it’s time to calculate your average monthly amount for each category. Go through each category one by one and add up each expense one by one. Pro tip: drawing a line through an expense on your statement once you add it helps cut down on confusion. Once you’ve added up all the expenses over the past 3 – 6 months, divide that number by the amount of months’ worth of statements you’re using. That is your average monthly amount for the category.

We recommend using at least three months’ worth of statements but—due to fluctuating expenses each month—six months should show an even more accurate picture.

 Step 4: Write it down: Once you have your average monthly amount for each category, write it in your affidavit and move on to the next until the entire affidavit is filled out. Check to make sure you’ve marked off all your expenses in your statements and each one is matched to an appropriate category.

Tips and tricks to keep in mind:

  • Double check your grocery, eating out, entertainment, vacation, and gas categories. If you don’t go through your statements line item by line item, you’ll likely underestimate these expenses.

 

  • If your financial situation changes, you can amend your affidavit before the claim is resolved.

Filling out a financial affidavit can be complicated but, if done right, it can help your case tremendously. If you’re going through a separation and have financial questions or would like to know your rights, contact our office today. Our knowledgeable family law attorneys are here to help.

Related Articles:

8 Facts About Separation in North Carolina

8 Divorce Tips Supporting Spouses Need to Know

Marital Fault is Not a Requirement for Spousal Support: Part I

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