How To Handle Credit Card Debt Problems When Going Through a Divorce
Divorce is never a great time in the life of a man or woman. Beyond the stress of determining the separation of assets, custody of children and other necessary parts of separating, the process also requires dealing with the debts of the couple. By understanding how courts divide the debts, it is easier to handle the debt challenges.
Joint accounts for any debt, such as credit cards, require the couple to split the debt during the divorce proceedings. Both individuals are responsible for paying any debts incurred on a joint account unless it relates to special circumstances.
Ideally, a couple who is getting divorced will eliminate the joint debts before going into the proceedings or will not have any debts under both names. This makes the proceedings of splitting up debts and assets much easier and manages debt problems a lot easier.
Huffington Post shares that debt, much like assets are split up in an event of divorce. However, couples who maintain separate accounts for debts, such as only having one sign the credit card, will only be responsible for the debts incurred on the personal account. This means that any debt on a personal account that the individual incurs is that person’s responsibility to pay. In some cases, this might result in paying more or less than the other spouse and can add to their debt problems.
Exception for Marital Necessities
While personal debts are primarily paid by the individual who incurs the amount on his or her account, many states have an exception. This means that the spouse who is not on the account might need to pay a portion of the debts incurred on the other individual’s personal accounts.
The exception is only for purchases that are considered a marital necessity. This means that purchases like food, clothing and other needs of the couple are part of both individuals’ responsibility despite the fact that a personal credit card was used for the purchase. Purchases that were not part of the marriage, such as personal hobbies of the other spouse, are not the responsibility of the individual.
Handling the Necessary Debts – Credit Card Debt Consolidation
After splitting up the debts and determining who is responsible for which debts, the method of handling the debts is the final part of getting the problems under control.
Credit card relief programs are available to help get debts under control. Depending on the credit relief solution, the method of handling the debts might vary slightly.
Credit consolidation is one option to help get the debt problems under control after returning to a single lifestyle. Consolidating debt brings down the payment amount as Time magazine shares that it can reduce the total interest on the debts in the program. The divorcee might be able to obtain a consolidation loan from a company. That is if the credit score is good enough for the loan. The other option is working on negotiating with the company to reduce the interest for a lower payment amount.
There are still those struggling after the divorce which is a result of higher credit card debt. One thing to look into is settling the debts. A settlement is usually a last resort solution before filing for personal bankruptcy. This is considered to handle the debts if it is not possible to pay the full amount. While settlement might take some time, it is one viable solution for consumers. Especially when the situation becomes dire and interest rate consolidation is not enough.
Divorce is a stressful time for any individual. It is a harsh change that might result in debts that are difficult to manage without extra help. Fortunately, credit card relief is available to help get an individual back on track financially. Obtaining more debts than expected from a divorce does not mean that finances are impossible to handle; instead, it means finding a solution that will make the debts easier to get under control.