Dealing with Debts after Divorce

 Posted on January 21, 2016 in Distribution of Assets

Adjusting to life after a divorce can be challenging. One of the hardest things can be learning to deal with the new financial picture, especially any new debts you may have acquired as part of the divorce.

Setting a Budget

Family courts not only have the authority to divide the marital assets, but they may also be tasked with dividing the marital debts. This may mean you have less disposable income than you did before the divorce. It is important that you carefully review your finances early on and set up a realistic budget.

Failure to pay debts on time will not only put you further behind financially, but can also end up getting you in trouble with the family law court. If you are ordered to pay a joint debt, and fail to do so, your ex-spouse could petition to have you fined for being in contempt of court.

Having a budget will keep you on top of your financial obligations, and can help you get out of debt faster.

Understanding Your Debt Obligations

While courts have the power to order the parties to pay certain debts, if both spouses are on the credit accounts, they both remain contractually liable for the payment of the debt.

If your ex-spouse was ordered to pay one of the credit cards, but he or she falls behind in payments, or fails to make any payments, the credit card company and its debt collectors can come after you to pay the debt. This may include suing you and garnishing your wages. While you can go to court ask the judge to order your ex-spouse to reimburse you for making payments in the debt he or she was supposed to pay, actually getting the money may be difficult.

Many people find themselves filing for bankruptcy after a divorce. If your spouse files for bankruptcy, you may find yourself on the hook for a variety of debts that you jointly owed with no way to get reimbursed.

The best way to avoid the divorce-to-bankruptcy pipeline is to make sure you fully understand your financial obligations and develop strong financial habits. While you cannot control the actions of any other person, you can make sure you are less vulnerable to the financial damage caused by others by having your own financial house in order.

If you have questions about the division of assets or debts as part of a divorce, you need to speak with an experienced Lombard family law attorney as soon as possible. Schedule a consultation with A. Traub & Associates and get the assistance you need today.

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