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Divorce and debt often go hand in hand
There’s an old saying that married couples argue primarily about money and sex. Of the two, money is the topic that’s most likely to involve a divorce. And when a couple divorces, all kinds of problems with debt appear, as the money problems, consolidated before, are now separated into two distinct sides.
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Divorce often creates money problems; instead of consolidation of debt, the problems spread
Statistics show that nearly half of all marriages in the United States end in divorce, and one of the reasons couples cannot stay married is that they have financial trouble. Most couples think their financial problems will go away after the divorce is final, but they are often shocked to find that the separation has made bad problems even worse. One spouse will often default on credit accounts that were held jointly, and the other spouse suddenly finds himself or herself having to deal with bill collectors over spending problems they don’t even know about. It’s a problem that occurs every day, and no one ever sees it coming.
Here are a few things you can do about your debt situation if you find yourself getting divorced.
- The first thing to do is to obtain a copy of your credit report. From now on, you will be establishing your own credit history and credit score; it’s important that you have a good baseline. Your report will list all loans, credit accounts, mortgages and other financial dealings that you and your ex have had together.
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- Pay particular attention to those accounts and loans which you held jointly. Your are responsible for any of these, and getting divorced will not remove your name from those accounts. Contact the lenders or credit companies and have your name (or your spouse’s, if you’re keeping the account yourself) removed from the account. Do the same for any accounts for which one member was the account holder and the other was an authorized user. Remember, if you are legally responsible for any debt incurred on accounts on which your name appears, even if you are divorced!
- Contact all of your lenders and let them know that you have been divorced. Instruct them not to make any changes on your account without your express permission.
- For anyone with a short credit history and a lot of debt, you may wish to consider a debt consolidation loan prior to the divorce being declared final. It may be easier to obtain the loan prior to the divorce than afterwards.
Divorce is often a traumatic time for anyone involved. It involves emotional and financial stress that’s made even worse by the burden of possibly having to find a new place to live. A good, thorough, organized approach to the financial aspects of it can make the separation and the life that follows much easier.
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