Money troubles can put a strain on even the happiest of marriages. Couples who regularly argue about money and debt are statistically more likely to divorce than couples without financial problems. However, divorce doesn’t make the debt go away. How can you prevent your marital debt from affecting your future?
Protect Yourself During Divorce
With the guidance of your divorce lawyer, your first step should be to close any joint accounts. Then, revoke authorization on any account where your spouse is an authorized user. This is very important. Our attorneys have seen too many situations where one spouse continues to rack up debt, leaving the other spouse in financial ruin.
If your spouse is a spender, ask your lawyer to pull up credit reports in both your names. Make sure there are no surprise accounts under your name.
Closing your accounts won’t get rid of the debt, but it will prevent new debt on joint accounts. You may be able to transfer the remaining debt to new accounts in your name only. It’s important to ensure the assets are still properly divided during the equitable distribution phase, however. Speak with your attorney before making any changes.
Pay Off Debt
It is usually a good idea to pay off as much debt as possible before the divorce becomes final. This may mean that you have to sell the house or other property to pay for the credit cards. You might want to keep the house for the sake of the children, but selling the marital home and other joint assets is a better option than risking foreclosure. It’s important to avoid selling any property without first consulting your divorce lawyer.
If you just can’t pay the bills, you may need to consider bankruptcy. If you and your ex can agree to file for bankruptcy at the same time, it will prevent creditors from coming after either party. If your ex is the only one to file, you may still be responsible for his debt. However, bankruptcy should only be considered as a last resort. The process is expensive and can harm your credit for many years.
If you’re considering divorce and are worrying about your debt, we can help you find a solution. Call 215-523-6900.