Spanish
The heartbreaking reality of divorce affects all involved as the parties face financial difficulties at the end of a marriage, especially divorce debts. Multiple factors can contribute to divorce debts and are unavoidable. These debts are difficult to recover, and you wonder if you don't have too much debt to divorce. Here are some of the debts that inevitably come with a divorce:
Changes in Household Debt
Depending on the financial situation of each of the families involved, the household will experience change after the divorce. What was usually a two-income household has now changed to two single-income households. Living in separate homes, both parties' lifestyles are affected, and they will have to downsize to ensure they can support themselves without financial support (from each other) and avoid or minimize divorce debt. Adjusting to the new situation, regular expenses can lead to a pile-up of debt because individuals may not be able to sustain themselves on their own.
Splitting the Marriage Debt
You already know that in a divorce, assets are divided, but who is responsible for this? In addition to dividing the assets, debt is also divided. In most cases, the court divides assets and debt and gives both spouses the responsibility of paying debt balances. The amount of debt to be paid by a spouse varies depending on the assets distributed. If one party receives more property, they may be required to shoulder more debt to create an overall balance of division. Divorce laws vary by state, so unique circumstances may determine how debt is distributed. And if there was a prenuptial agreement, one party could leave the relationship with more debt than they started with.
Debt for Legal Expenses
It's easy to accumulate debt in a divorce, especially through attorney fees and other legal expenses accrued by both parties. When working through assets or custody details, formal legal services become necessary to work through logistics. It is common for spouses to accumulate thousands of dollars in debt to settle a divorce proceeding, especially if there are disputes. Most of the time, each spouse pays for their own legal bills. However, there are some situations in which one spouse has to pay the legal bills of the other.
Other Divorce Experts
Apart from hiring a divorce lawyer, sometimes experts are hired as tax advisors, appraisers of real estate, child custody evaluators, or mediators. In these cases, the experts may need to present documentation and testimony to the court, thus increasing the cost even more. And with other court costs to be covered and added to the existing cost, the couple's savings are depleted.
Paying Child Support after Divorce
A divorce agreement determines the amount of child support to be paid each month, and even with support, this can lead to debt problems. A newly divorced parent is trying to settle into a new household and keep up with the costs involved. Also, the person who pays child support has to pay for this extra cost. When moving to a one-income household, this quickly adds to the divorce debt.
can change lifestyles altogether, and sometimes a career change is warranted to support the new lifestyle. For example, if a spouse was the stay-at-home parent, that parent now needs to step into a career since they are no longer provided for. The change impacts income levels, affecting costs. In addition, limited career history and experience limit earning power in the workplace. As an adult, taking on an entry-level job leads to underemployment, which results in the accumulation of significant debt.
Setting up New Household
The cost of living has now increased significantly for spouses who move out to live in separate households from a single household. There are new mortgage or rent payments to contend with, plus new furniture, bedding, dishes, TV, food, and more. Even though the physical assets of each partner were split, they still need the same household goods and services as before.
Moving Cost after Divorce
Depending on how assets are divided, one person will accrue the cost of moving out of the family home while the other person stays on. But in some cases, the court determines that the home must be sold, and both parties must take on the debt of moving trucks, moving labor, and the first month's deposit for their rent, etc.
In addition to the emotional trauma, divorce forces significant debt on the parties involved. It is not the end of the world, however. Learn about the numerous options for paying off your debt, such as debt consolidation, to help you pay off what you owe and get your life back on track.
However, if you apply for Chapter 7 or 13 bankruptcies for your credit cards, that credit report will stay in your file always. The report will stay on your credit report for 10 years when you file for Chapter 7, while Chapter 13 it’s 7 years. Your credit score will always be affected if bankruptcy remains in your file.