When a couple divorces and has no debts to split, the proceedings can be fairly simple to complete; however, this is rare. Most couples have debt, and finding the best and right way to divide this debt can be challenging. Here are some tips to help you determine the best way to split debts and handle issues relating to debts if you are getting divorced.
Add It All Up
The first goal is to find out exactly how much debt you have as a couple. This does not have to include the house you own or the cars you drive, but it should include every other debt you have. The house and the cars may have loans with them, but dividing these is a completely different issue. The other debts you have may include tax debts, credit cards, medical bills, and other types of unsecured debts.
The debt you have should all be split in half, so that each spouse is responsible for the same amount after the divorce. By adding it up, it will be a lot easier to know where to begin with dividing.
Start With Debts In Only One Name
If any of the debts you have are in only one spouse's names, you can begin your debt division by assigning these debts directly to the spouse whose name is already on the debt. You should understand that both spouses are still equally responsible for these types of debts—it is just easier to start by dividing debts that are in only one person's name. After that, the joint debts are figured into the mix.
For example, if a couple has debt that totals $20,000 and $3,000 of this is in just the husband's name, this $3,000 debt would immediately be assigned to the husband. If the remaining $17,000 was joint debt, the wife would first be responsible for $3,000 to make it even. This would then leave $14,000 debt, which would be divided by assigning $7,000 to each. Therefore, both spouses would be left owing $10,000 each.
The ultimate goal of dividing debts in a divorce is to make sure the debts are divided equally and are placed in the correct spouse's name after the divorce. This will eliminate problems later on, such as if one spouse is responsible for a debt but will not pay it.
Look Into Loan Options
Even though there may be some debts in just one name, it's more likely that most debts will be in both names. To make the division of these debts easier, you should consider looking into getting personal loans. If each of you can consolidate the debts you will be responsible for into a loan in your own name, the other party will have no risks after the divorce is through. This is the absolute best way to divide debts in a divorce; however, it may not be an option if you do not have good enough credit.
Include Specifics Into The Divorce Decree
If getting loans in your own names is not an option, you will both want to make sure that the specifics of the division of your debt are included in the divorce decree. The decree should state the names of the debts and the balances, along with the person responsible for the debts.
By doing this, you will have protection in the future if your ex fails to pay the debts he or she was supposed to pay. If, for example, your ex was told to pay a certain credit card bill and he or she fails to do this, your credit will be affected. The best thing you could do to protect your credit is to pay the bill yourself; however, this may not seem fair. It isn't really fair, but you can then take your spouse to court to insist on getting the money back from him or her for this. As long as the decree states that he or she was supposed to pay it, the court will rule on your behalf.
One of the reasons divorces can take a long time is due to finding good ways to divide debt. Hopefully these tips will help you as you proceed through your divorce. If you would like to learn more about this, contact a divorce lawyer in your area today.
