There’s a lot to contend with before, during and after divorce, including debt. No matter your situation, there’s a good chance that you have joint debt with your soon to be ex-spouse. How you deal with this during divorce will impact your life in the future.
Know your debt inside and out
The most important thing you can do is list out all your debts, broken down by those that are separate and those that are marital.
For example, joint credit card debt is marital. Conversely, if your spouse brought a student loan into the marriage, you may not be on the hook for paying any of it post-divorce.
Along with a checklist of all your debts, be sure to attach a number to each one.
How to manage debt in divorce
There’s no exact science to managing debt in divorce, but there are a variety of steps you can take to maintain stability now and in the future:
- Don’t get stuck with your ex’s debt: There’s no reason to take on debt that you’re not responsible for. This is why it’s important to understand the differences between separate and marital debt.
- Work it out before your divorce: If there’s any type of debt you can eliminate before divorce, such as joint credit cards, you should consider doing so. This is one less thing you’ll have to work through in your divorce.
- Budget for the future: When you neglect to do this during your divorce, there’s a greater chance of weighing yourself down in the future. Your budget should clearly outline the income you expect to earn, as well as your monthly expenses. At a minimum, you need to earn as much money as you plan on spending.
Don’t focus so much of your efforts on property division that you overlook the importance of debt.
You have legal rights and it’s a must that you protect them. When you take the right approach, you’re able to minimize the amount of debt that you take on, thus making it easier to maintain your standard of living once your divorce is in the past.