Debt Relief In A Divorce
By Brian Williams on Wednesday, November 28th, 2007 :: 1:11 pmCategory: Watching Out 4 You
Oppressive debt only adds to the emotional strife in a divorce. Spouses have to figure out how to divvy up assets but also decide who is responsible for certain debts. Debt settlement and debt consolidation can help smooth the transition from married life to single life.
Debt consolidation can help you combine high-interest credit card debt into a single, monthly payment to better manage your financial picture. Debt settlement helps you work out lower debt balance, making it easier to pay off debts in a shorter amount of time.
Debt Problems Add To Pain Of Divorce
Debt woes cause enough emotional turmoil in a house and marriage. In fact, money problems are major contributors to marital breakups. Like it or not, divorce is part of everyday American life. There are 3.7 divorces per 1,000 population in the U.S., according to the U.S. Census Bureau. The figure comes into perspective considering the U.S. population of about 300 million people and the fact that not everybody gets married. Married couples share income – and debt. That debt must be divided when the marriage dissolves.
In fact, many households have more debt than they can handle, mostly in credit card debt. Spouses may have several credit cards in joint or separate accounts. A person’s financial mismanagement can also reflect poorly on his or her spouse. In joint lines of credit, late payments or defaults damage the credit to each party in a marriage.
The situation worsens when one spouse in a marriage conceals financial information, leading to mysterious lines of credit and a worse debt situation than previously thought. As part of the divorce process, couple should get an accurate account of their whole financial situation – debts included. One step should be obtaining credit reports from the three credit reporting bureaus, Equifax, Experian and TransUnion.
Bankruptcy Adds To Divorce Costs
People facing divorce and impaired finances may consider bankruptcy to get out of debts. Divorce is expensive enough, and bankruptcy will make it more so. A divorce costs couples several thousands of dollars mostly in attorney fees.
Filing for bankruptcy during the divorce process means you pay more in attorney fees. A new bankruptcy law passed in 2005 made it harder to eliminate debts through the federal court process. The rules also made it harder to file for bankruptcy. It is much easier for all parties to resolve and settle your debts before the divorce is final.
Author bio: Brian Williams, a graduate of the University of Texas at Arlington, has 11 years’ experience writing and editing at daily newspapers in Texas. Learn more about Credit Solutions.
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