Saturday, September 12, 2015, AM | Leave Comment
Divorce is never a fun process to go through. This can be even truer if you and your spouse have debt together. You never thought you’d be divorcing and dealing with a large amount of debt at the same time.
You may be wondering how to handle the situations simultaneously. Luckily, you’re not the first couple to experience this.
See how you can manage your debt in the midst of a legal separation.
Know What You Owe
The first step in managing debt is to determine exactly how much money you owe to creditors. Your spouse may be a compulsive spender and have debt you don’t even know about. It seems unfair, but you may still owe half of all debt, whether or not you were the one who incurred it personally. Get a hard number so you know what you’re dealing with.
Put Unused Credit Cards in Your Name
If you have a credit card with no debt on it, cancel it and put it in your name only. This way your spouse can’t rack up more debt and make you pay for half even though you’re already divorcing. The last thing you want is to add to your debt while you’re trying to eliminate it!
Court Will Split Debts
In some cases, the divorce court will split your debts in half when you divorce. They may use the debt you brought to the marriage to determine the percentage each spouse is responsible for going forward. This is a relief, as you can pay down your portion of the debt as quickly as possible without being held back by your spouse. Coil Law can provide additional details on how your divorce will influence your debt and finances.
Make Your Spouse Comply
Maybe your spouse owes a lot of money on your joint debts, but they don’t pay. You can petition a court order against them, and they’ll have to prove why they haven’t paid yet. This action can help you repair your credit score faster, since your spouse is legally obligated to follow court orders.
If you can afford to pay your spouse’s payment for a month or two, feel free to do so. Just keep the receipts and use a lawyer to get reimbursements from your former spouse later.
File for Bankruptcy Together
Another option is to file for bankruptcy together. Maybe your debt is so insurmountable that the only way to clear it is bankruptcy. This will absolve you from paying any debts and dealing with joint payments. However, spouses who file for bankruptcy still have to pay child support, so keep that in mind.
Clear Debt Before Finalization
If none of these options sound good to you, you can go the old-fashioned route: try to get rid of debt before you finalize the divorce. While your money is still tied together, use it to quickly pay off debt, and then file for divorce. This will avoid legal and money complications down the line.
Each divorce and debt situation is different, so it’s best to talk to your divorce lawyer for specific advice. But use these tips to help you understand your options going forward.Facebook.com/doable.finance