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While divorce can be best for everyone involved, the truth remains that it can put a financial strain on a person all too easily. Consider the fact that divorcing couples are going from a household where expenses are carried by two people to a household where one person will be responsible for paying expenses and you can see how the financial strain can be immediate and difficult. There is also the fact that, on top of everyday living expenses, it is likely that the former spouses will continue to carry debt obligations to deal with. After all, the majority of people in the U.S carry some form of debt and debt will be divided among spouses during divorce proceedings just as assets will be, in an equitable manner. To help you start out your post-divorce life on the right foot, we are going to walk through some tips on how to manage debt after divorce.
Dealing with Debt After Divorce
There are a number of different types of debt that will be divided during divorce proceedings. Some of the most common forms of debt that will be subject to division during a divorce include:
- Mortgages
- Credit card debt
- Student loans
- Personal loans
Because marital debt will be divided during divorce, it is likely that both former spouses will carry some debt obligations after the divorce is finalized. Additionally, each spouse may also have individual debts that will remain their obligation after divorce.
Managing debt while your budget is already likely strained post-divorce can be a difficult feat to manage. Having to deal with debt on top of the fact that you likely went from a dual income household of shared expenses to a single income household where you are the sole person responsible for paying expenses can seem like too much to handle. It will likely, at a minimum, necessitate a significant adjustment of your standard of living.
The fact is, however, that there are steps you can take both before and after divorce to help deal with debt obligations after the divorce has been finalized. Depending on the situation and how possible it is to work with your soon-to-be former spouse before a divorce filing, you both may benefit from working together to get debt under control before filing for divorce. Assessing your debts and financial situation together going into a divorce has benefits you both may reap. Some steps both of you can do to get your financial situation in order before debt may include:
- Assessing your finances
- Request a credit report copy
- Discuss who will assume what debt
- Sell off certain assets you may be unable to manage after divorce, such as real estate
After the divorce has been finalized, there are more steps you can take to manage debt. For instance, after you have established a new bank account under your name, consider setting up auto pay on your debts to help ensure that your bills are paid on time. If auto pay is not offered, be sure to calendar reminders for when certain bill payments are due.
A budget can also be critical to post-divorce financial success. Create a budget and stick to it. Set up a debt repayment strategy that can work with this budget. It may involve reducing your living expenses. It may involve selling certain assets to pay down your debt or clear it. Also, be sure to remove your name from any debt obligation that was assigned to your former spouse during divorce proceedings.
Florida Family Law Attorneys
The trusted family law team at Bernal-Mora & Nickolaou wants to set you up to thrive after a divorce. A big part of this can be working to help manage and protect your financial best interests throughout the process. Contact us today.
