Debt Management While Separating
If you’ve ever been separated you’ll realise that the proceedings can leave both parties deeply in debt. The emotional side of divorce can be taxing, but it’s the money side that can be one of the most demanding aspects of separation. And tallying up the debts from the marriage can leave a huge deficit in your bank account.
Since in fiscal and emotional terms the whole divorce proceedings can be costly, there have been requests for a more understanding way to administrating the separation terms. The “Debts and divorce campaign”, has been launched by the UK Insolvency Helpline to provide a guided avenue in dealing with family debts. This is good news as forty five per cent of people questioned said that divorce caused them more financial difficulties than redundancy or bereavement.
In the survey, nearly a third of divorcees stated that they needed professional debt counselling, while 28% found it a strain to adapt to having just one household income. In fact ten per cent had major problems sorting out their debts and had to consider bankruptcy.
The research which was commissioned by the UK Insolvency Helpline, has clearly shown that the cost of separation can leave couples heavily in need of debt management . 16% said they had used credit cards to purchase holidays or luxuries they wouldn’t have purchased if still married. This kind of spending can cause problems during the divorce negotiations.
Only 6% of divorcees said they had managed to control their finances during the divorce proceedings and had come to an friendly arrangement. Of the 76% of respondents who terminated their marriages favourably, most said that their finances now needed extensive review and reworking.
On as a rule those divorcees who contacted the UK Insolvency Helpline had between £14,000 and £24,500 of unsecured loans, while half of them had debts of between £2,300 and £6,200, primarily resulting from the costs of moving into a new home.
Many people questioned had entered into an Individual Voluntary Arrangement which is a gentler option to bankruptcy whilst still resulting in greatly reducing debt levels.
When it came to practical information, many relied on the CBA, whilst some relied on friends and others went to counsellors or used consultation organisations.
A spokesperson for the UK Insolvency Helpline said, “We have released the Debts And Divorce Campaign to try and understand our callers’ spending habits. We can then assist them in planning for the future so that they should be able to keep their legal costs down as they are instructed through the entire divorce process.”
Tags: debt, Debt Advice, Debt Help, debt management, divorce, seperating
