Organising Debt During Divorce
Summary:
If your getting separated you’ll understand that the process can leave both sides deeply in debt. The emotional side of divorce can be taxing, but it’s the money side that can be one of the most stressful aspects of separation. And tallying up the debts from the marriage can leave a big black hole in your available funds.
Since in financial and emotional terms the entire divorce proceedings can be expensive, there have been calls for a more amicable approach to negotiating the separation terms. The “Debts and divorce campaign”, has been released by the UK Insolvency Helpline to provide a guided method in dealing with family debts. This is good news as over a third of people questioned said that divorce caused them more money difficulties than redundancy or losing their partner.
In the questionnaire, a third of divorcees said that they required professional debt counselling, while over a quarter found it a strain to adjust to having just one household income. In fact ten per cent had major difficulties managing their debts and had to contemplate bankruptcy.
The study which was funded by the UK Insolvency Helpline, has clearly shown that the cost of separation can leave people burdened with debt. 17% said they had used credit cards to purchase holidays or luxuries they wouldn’t have bought if still married. This kind of spending can cause problems during the divorce negotiations.
Only eight per cent of divorcees said they were able to balance their finances during the divorce proceedings and had arranged an friendly agreement. Of the 77% of those questioned who ended their marriages on good terms, almost all said that their finances now needed extensive review and makeover.
On for the most part those divorcees who got in touch with the UK Insolvency Helpline had between £15,000 and £24,500 of unsecured creditors, while half of them had debts of between £2,200 and £5,900, mainly as a result of the cost of moving into a new home.
Many people questioned had entered into an Individual Voluntary Arrangement (IVA) which is a gentler option to bankruptcy whilst still succeeding in largely reducing debt levels.
When it came to functional information, many relied on the Citizen Advice Bureau, whilst some relied on friends and others went to counsellors or used support organisations.
A spokesperson for the UK Insolvency Helpline said, “We have launched the Debts And Divorce Campaign to try and comprehend our callers’ spending patterns. We can then assist them in planning for the future so that they should be able to reduce their legal costs as they are guided through the entire divorce process.”
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Tags: debts, divorce, monet problems
