It may seem like a debt has no bearing on divorce. But like in marriage,
it can either make or break your chances of getting through. Debt
affects what assets and liabilities you are able to take away from the
divorce settlement. And it may complicate the proceedings with
clarifications of whether or not it is lawful for one to take which
credit and why. If you and your ex have been quite irresponsible when it
comes to managing your finances when you were still together, you both
have to be vigilant this time around, that is if you want to simplify
your separation. Divorce lawyers will often advise you to handle debt
and divorce simultaneously with debt consolidation and then settle who
pays what due after the divorce is over.
To go about the process, here are some worthwhile tips to consider about debt and divorce:
a. Clarify if your credit card debts are made through joint or single
accounts. And once you know, make arrangements with the bank to cut off
all cards, consolidate the debt to one joint account and then prevent
further expenses by asking them to secure both you and your partner’s
signatures before any transaction is made. This should make you both
still responsible for the debt you have accumulated over the years of
marriage as well as in control of how each other spends the money made
during the union while undergoing divorce.
b. You then have to observe measures on how you could clear up all the
outstanding balances you have on joint accounts so that you do not have
those credits hanging over your head during the court proceedings. You
could probably agree to sell some personal belongings to make the cash.
Or you could bargain for debt settlement.
c. Now, if you and your partner are not able to meet all your dues prior
to the finalization of the divorce, you could ask the bank to equally
divide the payments left onto two individual accounts so you could both
equally move on. If there are any contentions, this should be raised
during the negotiations and justly decided by a mediator.
d. If you are financially sounder than your spouse and are feeling a bit
apprehensive, you could have the credit card company transfer all the
cards to your name only so your spouse does not have access to them
before or after the divorce is settled and add on to the debt incurred.
Yes, you will carry the burdens of the liability. But then, at least you
will be in control of them. If the bank refuses to do so to protect
their interests, you could have all your accounts cancelled and then
transferred to another account in another institution that offers
smaller interest rates for a specific period of time.
Managing debt and divorce may seem overwhelming at first. But with a
little guidance, you will be able to get out of the bind you’re in in
one piece and start over a new leaf.
