Managing Debt in Your Divorce
When faced with the prospect of divorce, it’s only natural for couples to start worrying about property division, especially about how their assets will be split. While asset division is an extremely important part of the divorce process, it’s important that couples not overlook the impact of debt not only in divorce proceedings, but also on the parties’ post-divorce finances. Although we have included a few tips that could help you better manage your debt during divorce, we also know that you probably have a lot more questions and concerns, so if you and your spouse are considering divorce, please contact our experienced Fort Lauderdale property division attorneys to learn more.
Creating a Comprehensive Checklist
One of the first and most helpful steps that a divorcing couple can take when engaging in the property division process is to create a checklist that clearly outlines the parties’ debts. This will not only allow spouses to remain organized throughout the divorce process, but can also help eliminate the risk of overlooking costly debts.
Making Note of Separate and Joint Assets
When creating a debt-related checklist, divorcing couples will also want to start thinking about and taking note of whether certain debts are separate or joint. If, for instance, one spouse took out a personal loan before the marriage, he or she will probably end up being solely responsible for repaying that debt after the finalization of the divorce. Couples who fail to take this step could end up paying half of the balance of a former spouse’s debts.
Discussing How to Repay Joint Debts
Couples who still have a relatively amicable relationship may also want to enter into discussions about the possibility of paying off some joint debts before attempting mediation or litigating the case. If this option isn’t available, it’s still a good idea to talk about joint debts and even try to reach an out-of-court agreement on who will be responsible for which portions of the debt after divorce.
Preparing Your Budget
It’s best not to assume that a person will make it out of the divorce process without having to take on any of the couple’s debts. For this reason, divorcing couples are usually encouraged to begin adjusting their budgets as soon as possible to make sure that they will be able to meet their monthly obligations down the road.
Finally, couples who already have significant debt and have filed for divorce should try to avoid taking on any debt that they simply cannot pay off. It, for example, may seem like staying in the family home is in one of the party’s best interests. However, doing so could end up being a serious financial mistake if the individual who agreed to take on the debt cannot make mortgage payments or keep up with the costs of maintaining the home.
Accounting for Your Debts During Divorce
Managing debt during divorce can have a significant impact on a couple’s financial position after divorce. For help coming up with a fair property settlement agreement with your own spouse, please call Florida property division lawyer Sandra Bonfiglio, P.A. at 954-945-7591 today.