Debt after divorce is something that is faced by many people all around the US. As a couple splits up all the assets after parting ways, it’s also very important that they discuss pending debts if any…
When two individuals split up they undergo a very tough time. Most couples try to sort out what can be done to repair the relationship, while others who are convinced that they want to legally separate, file their divorce papers. When two people decide to divorce they not only split up the family, kids and assets; they also split up their bills, rents and financial statements.
We all have seen on TV how couples fight off each other for money when they separate. First of all, majority of the divorces are not as dramatic as they show it on TV, and second, people who separate just witness a painful separation procedure which cannot be described in words.
When a couple of files for divorce, the law not only separates their assets but also their bill payments equally. Most people just want to finish their divorce proceedings and move on with their lives but debt always becomes an issue of concern. This is a string which should be pulled very lightly because most partners would just want to brush off the payment stuff on one another.
Both individuals should have a good look at every bill and financial statement which comes into the house to get a good idea of the economic position of the house. Settling debt after divorce can be very messy if a couple doesn’t discuss the situation beforehand.
Debt Settlement After Divorce
As part of the divorce judgment announced by the judge, the court will equally divide the couple’s assets and debts. The court will also decide on who will pay how much regarding the bill payments. In most instances, bills are divided equally, but in some cases the court can also divide them more or less depending on the earnings of both individuals, so that the payments are balanced properly. Here are some pointers to follow, so that debt doesn’t become an issue after divorce.
Discuss the Budget
Even if two people are separating, this doesn’t mean that they can’t think about each other’s happiness. The couple should make a list of all the expenses that happened during the time when they were married and see who has to pay for what. The crucial element here is to be honest and agree to a mutual consent which is acceptable to both the parties.
Control Unnecessary Spending
Both the parties should control unnecessary spending. Once a budget has been made, try to keep up with it and don’t indulge in wastage of money. Women are addicted to shopping and men mostly to drinking, smoking, gambling and purchasing electronic items. Think about the money which has to be paid for the divided bills. Also, learn how to keep divorce costs down.
Know the Laws
Every state has different laws regarding the splitting of assets and bills. In most states, any debt incurred by the spouse before marriage is solely his/her responsibility. If one spouse gets a major portion of the debt, he/she can consider getting in touch with the money-lender and try to negotiate at a lower interest rate. Many companies will agree to this negotiation as they would not like losing on a client. Always remember that credit card companies, banks or mortgage firms are not responsible for divorce proceedings. They will extract money from the individual whose name is on the bills. Period.
If one spouse is not paying his/her share of bills on time, the creditors will come after the other significant one. Hence, it’s necessary that the creditors should also be informed about the divorce. Individual credit cards are the responsibility of the person who opened them. Joint accounts are the responsibility of both the spouses. Credit card companies don’t care about the divorce or its proceedings. They just want their money, so if one spouse doesn’t pay the bill the other one is considered responsible for the payment.