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How to Split Debt in Divorce

You hope that your marriage lasts forever, but just the same as anything in life, there’s no way of knowing what the future will bring. And for that reason, you should always be prepared to manage your finances in the event of divorce.

While the majority of people focus their attention on property division – such as who gets the house and motor vehicles – it’s important to spend just as much time thinking about your joint debts.

Before we go any further, there’s one thing to remember: the debt that you and/or your spouse bring into the marriage does not always come into play. If it’s remained separate, the other individual isn’t typically on the hook.

The idea of splitting debt is simple enough. However, when it comes to actually doing so, you must consider which plan of attack makes the most sense.

Here are some basic ideas to consider:

1. Balance Transfer Credit Card

This is an option to consider if you have joint credit card debt.

While it’s possible that one of you will take on this debt in exchange for giving up another type, things don’t always work out this way.

The best way to split a credit card balance is with a balance transfer credit card. This allows each individual to take on their portion of the debt. Once complete, you are now 100 percent responsible for the debt. You can manage it however you best see fit, without any oversight of your soon to be ex-spouse.

2. Debt Consolidation Loan

There are many ways to consolidate debt, such as through a personal loan.

With this, you can bring all your debt under the same roof. This makes it easier to manage the debt, while also allowing you to save money on monthly finance charges.

Don’t get ahead of yourself by applying for a debt consolidation loan too soon. Doing so before you’re ready can complicate the divorce process.

3. Pay it Off Together

Should you be willing to discuss your joint finances with your spouse as you move toward divorce, this is an option to consider.

For example, if you have joint credit card debt and enough money in the bank to pay it off, doing so before the divorce process can save you a lot of time and aggravation.

The key to success with this is that the two of you must be on the same page.

Final Thoughts on Debt and Divorce

Most divorcing couples have some type of debt. Some have more than others, but even if it’s not a lot you need to make sure you have a plan of attack.

When preparing for the divorce process, think long and hard about how to tackle each type of debt. This will help you formulate a strategy you can trust and rely on.


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