The issue of money is among the most important issues that couples face when divorcing. The outcome decided by the court will determine greatly the reality of a financial hardships or not. Part of the money equation is determining what to do about any shared debts.
Debt between married couples need to be addressed. The types of debts matter and may influence what you are left with at the end of the final divorce decree. Every divorcing couple should ask themselves the following debt-related questions:
- What category of debts do we have? – Categorize your debts. Identify which ones are from credit cards, store cards, personal loans, car loans, family loans, small business loan, etc.
- Who do these loans belong to? - Are your loans joint or individual? List whose names are on the loans and the dates the loans were taken out. Timing is important and could play a role in what is finally decided.
- What payments of joint-account balances can you each agree to pay? – See if there is any type of agreement you can come to privately on shared accounts that have an outstanding balance to be paid. It is always easier to come to an agreement outside of court than to battle these details before a judge or through lawyers. It might be helpful to print and look over shared-account statements and highlight the purchases you are each willing to take responsibility for and pay.
Despite the tension and emotional stress, cooperation between divorcing couples is best. Issues of debt need to be evaluated and organized. Taking a good inventory of what you have individually and together is important. The timing of the debts also matters. If you were not legally married when you took out a personal loan, present evidence of the date you took the loan out versus your marriage date.
Debt evaluation in divorce is one of many factors considered between a couple. You may need to hire a forensic accountant to help you. Overall, you deserve the peace of mind that your outcome is fair according to the law.