The marriage is not working out, you and your spouse have agreed to file for divorce, but there is a lot of debt still involved in your marriage; what do you do? Just because you are divorcing your husband or wife does not mean that you are divorcing the debt that you two accumulated. Divorces are hard enough already, adding debt to the divorce is just going to increase that headache even more. FOX Business recently did an article on how to divorce your debt while you are divorcing your husband.
This article is answering the specific question of someone who wrote in with debt problems that is going down the divorce road. While FOX Business offers financial advice to this woman in her specific situation it is clear that not everyone is going to have the same issues in their own divorces.
There is, however, some general advice regarding divorce and debt that everyone should be aware of if they find themselves in this situation.
It is important to keep in mind that there is more than one type of debt. When you are going into your divorce hearings or sitting down to talk with your lawyer and you are explaining how much debt there is between yourself and your spouse you need to be aware of the fact that it simply is not that black and white. Generally, there are two main types of debt which are community property and living expenses. The living expenses are exactly what they sound like: rent or mortgage, utilities, groceries, and everything else that falls under the category of living. Community property is pretty much everything else. If you and your spouse own a boat or a flat screen television then that is your community property. When going in to speak with your attorney about the best ways to divide that credit card debt it is important that you realize that the division is likely to occur based on the kind of debt that it is.
Another factor to keep in mind is that different states have different laws. This is why it is so important that you see your lawyer as soon as possible to figure out what the laws of your specific state are. If you find yourself living in a community property state then the court will most likely decide that all debt jointly accumulated over the course of your marriage is the responsibility of you both and the debt will be divided directly down the middle. On the other hand, if you and your spouse live in a state that is not governed by the laws on community property then the courts most likely operate based on what is called equitable distribution. This means that in the end it is totally up to the court how the debt gets divided, which does mean that one partner could end up having to pay most, if not all, of the debt off by themselves.
The best thing that a couple can do when going through a divorce with the debt piled up is to handle it before the divorce is final. It may not sound ideal to sit down and have a conversation with your soon to be ex regarding the debt that you both have accumulated, but if you are able to do so then it is most definitely in your best interest. Divorce is already a headache for both parties involved, and adding debt to a divorce is adding a lot of complexity.
Adding debt to your divorce will keep you tied to a person that you are trying to break away from. If possible, you and your spouse would both be better off getting the debt paid off before, or even during, your divorce. It will lessen the complications that debt will bring not only to your divorce, but also into your life after your divorce.
If you and your spouse are contemplating divorce then try to have a discussion about your debt and what is owed and who should be responsible for it. If you are able to work out a plan to erase your debt prior to divorcing then you will both be less burdened afterwards.