You've finally decided to file for divorce. You're going to be dealing with a lot of complicated issues. While you're busy dealing with the emotional aspects of divorce, don't forget about the bills. Debts that aren't handled properly during the divorce can turn into credit problems after the divorce. Here are some simple tips that will help you solve your debt issues before the divorce is finalized.
Pay Off Debt Together
If the amount of debt you and your spouse share is relatively small, you may want to pay it off before you file for divorce. This will allow you to walk away from the marriage without marital debt hanging over your head.
If you don't have the cash to pay off debts, you may want to consider liquidating some of your assets and using the proceeds to clear up your debts.
Trade Assets and Debts
Debts are often a good way to obtain the assets you want out of the settlement. If you have assets that you want, you can agree to take on additional marital debt obligations. For instance, agree to pay off debts that are equal to the value of the assets that you want.
Split the Debt Evenly
If you and your spouse don't have assets to divide, but you do have debts, it may be beneficial to divide them up evenly. This will ensure that both of you leave the marriage with the same amount of debt.
File for Bankruptcy before the Divorce
If you and your spouse have significant debt, but no way to pay it off, bankruptcy may be your best option. Filing for bankruptcy before you file for divorce will allow you to clear up joint debts that might be difficult to divide. It will also prevent undue financial hardship if neither of you has a steady income at the time of your divorce. Filing for bankruptcy will require you and your spouse to work together during the process. If your divorce is not amicable, bankruptcy may not be a viable option for you.
Divorce is never easy. Worrying about marital debt can slow things down and add stress to the process. The information provided here can help you deal with your debt in a way that's beneficial for you and your spouse.
If you and your spouse cannot reach an amicable agreement about your marital debt, it's important that you discuss the matter with an attorney (such as one from Souders Law Group). Your attorney will be able to help you resolve your financial issues.
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