Divorce can certainly be a messy process and the wake of the issue of a divorce can be even messier. It has been seen that majority of the couples start off with divorce proceedings with some or the other form of debt that they had incurred throughout their marriage. The stress of debt is huge when it comes to fighting with the emotional pangs of going through a divorce. You have to ensure that you take the right steps so that your financial future post-divorce is fit for you to lead a happy life. For this, you need to comprehend in detail what happens to debt during a divorce.
Being informed about the Community Property laws
Did you know that there are community property states? For instance, California is a community property state. This means that if you’re residing in California, then the assets gained and the debts that you incur during your marriage belong to both spouses, irrespective of who actually is responsible for the debt and whose name is attached to that respective account. If any of the spouses didn’t enter into any prenuptial agreement with regards to division of the assets and the joint debt, the law demands that community property and debts will be divided equally during the event of a divorce. If one spouse incurs credit card debt under his or her name, this means that the other spouse will also be responsible for it, even if he or she has not incurred that debt. This is what happens in the community property states.
What happens to your joint credit card accounts?
Most married couples have more than one joint account, whether it’s a credit card or a home loan or an auto loan. When both the spouses apply for loan together, both are liable for repaying the loan, even when the divorce law assigns the debt to a single spouse. In an ideal situation, the joint credit card accounts should be closed or paid off before finalizing the divorce. If none of these options are available to you, you should be sure that all your accounts are monitored closely lest you are responsible for it even with no fault of yours.
Financial tips for men who are going through a divorce
In most TV shows and articles, you will see most of the advice in favor of women, especially when it comes to facing a divorce. But here is a different approach and below listed are some tips that men should follow regarding their finances during a divorce. Check them out.
Be aware of the numbers: For an average divorce, experts say that you shouldn’t expect to pay anything less than $20,000 which includes paying lawyers, experts, searching for a second place for you to live in as well as the financial advice that you need during such times. However, if it’s a mutual divorce and your ex-spouse is a working woman, you don’t have to pay a huge amount as a ransom. So, you should be aware of the numbers so that you can manage your finances and stay safe during a divorce.
Create a post divorce budget: When you had a happy married life, you thought of your finances in a definite manner. But now that you have separated with your partner, you should again create a fresh new post-split budget and follow it. Here you have to include each and every divorce-related expense like alimony costs, child support expenses and other regular expenses that are also going to change once you’re single all over again.
Divide things equally: A half-hearted split is easier said than done. Just as you’re getting divorced or separated, that doesn’t mean that you will still strongly feel for your ex. There are lot of men who wish to continue even when there is no such obligation. Hence, dividing your property equally, even when it is artwork, furniture or music equipment, should be done in such a manner that doesn’t give birth to resentments.
Control your impulsive financial decisions: Divorce is almost like than you can ever imagine. So, you have to control your emotions. Although this is tough but you should treat your divorce with a sense of gravity. Avoid making any impulsive financial decision within 6-12 months of your divorce. Hold on to the status quo in your life.
Hence, if you’ve ended up your marriage or you’re trying to end it up, you should be watchful about every single financial decision that you make. After starting off with your single life, if you’re still in debt, you may take help of the debt settlement companies. You may learn more about debt settlement companies and how they work by searching online. Stay out of debt and have control on your emotions after going through a separation.
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