Divorcing with Debt

Freya’s Financial Facts Regarding Divorce

West Coast Woman

Published July 2005

Questions & Answers

 Question: My Wife and I have accumulated a lot of debt during our marriage. Now that we are getting a divorce, how do we handle it?

 Answer: First of all, know that you are not alone. Many of our clients tell us that they have accumulated a lot of debt during the marriage! Often, the financial problems have something to do with you and your partner getting a divorce. It is unfortunate that couples don’t get financial counseling until they are ready to divorce. The good news is, it is never too late to get financial assistance. We spend a lot of our time educating clients about their finances. It is important for both of you to know how you are going to survive financially now and after the divorce is final. Debts that were obtained in both spouses names during the marriage (meaning both husband and wife signed a document or application saying that they were responsible for the debt) remain the obligations of both parties after a divorce, no matter what a divorce decree says. Creditors are not party to your Marriage Settlement Agreement. Therefore, if your ex-spouse does not pay a debt that he/she was assigned in a divorce decree, then you could be held accountable for it. We assist couples in determining what is the best method to divide the debt so as to reduce any problems later on.

 Question: My second husband and I are going to get a divorce and we have two children. I was also married before and am receiving Child Support from my first husband. I know my first husband isn’t paying me as much as he should but I don’t want to create waves. What should I do?

 Answer: The financial and or legal professional that assists you with your divorce will calculate support. It is not really a negotiated item in the courts eyes. The income figures used to calculate support is usually more of an arguing point. They can calculate what child support should be for your children from your first marriage too. Modifying child support is not a complicated process so don’t be afraid to set the record straight now. The system was designed so that child support could be modified. It is not fair to saddle your current husband with expenses for your other children because you don’t want to ask your first husband to pay his modified amount of child support. Both parties should be paying their proper child support based on the income they have today, not the income they had when you got divorced. Now is the time for everyone to begin handling their own responsibilities. The fathers and mothers of your children have a certain financial responsibility for the well being of your children, as you do.

 Question: My husband and I are having a terrible time trying to figure out if we should get a divorce or not. We have been married for over 30 years, we have a complicated Trust, and I am just not sure it is worth going through at our age. He has taken my access to money away but gives me spending money, so I am hesitant to get an attorney at this point.

 Answer: You are the only one that can decide whether or not you want to proceed with a divorce. I would recommend that you begin counseling if you aren’t already. If you think the marriage might be salvageable, meaning your husband would attend counseling with you, then I would start with that. I would also recommend that you get advice regarding the “what if’s” in your life. It is wise to examine all the “what ifs” before proceeding, and that is the backbone of the service we provide. Feel free to give us a call to schedule a consultation.