Dec 06, 2013

When you being to think about getting divorced, you may start with the emotional side of things. However, sooner or later, the financial side of the divorce has to be dealt with, including debt.

You and your partner probably have debts together, which makes it difficult. The lawyers and those mediating your divorce will help make sure the debt ends up handled the right way. What you may not realize, however, this isn't as easy as it sounds.

The original creditor doesn't have to agree to release one partner from the debt. They really don't care about your divorce and they see the debt as a legal obligation of both parties.

Marital status doesn't matter to creditors and your joint accounts may remain that way, even after the divorce. With that said, it's important to understand what you and your soon to be ex-spouse need to do to protect your individual credit.

Three Tips for Dealing with Debts After Divorce

1. Pay off Joint Debts Before the Divorce

In the best possible circumstance, all joint debts would be paid off before the divorce is finalized. This may require selling your home, cars and other properties securing the debt. Without any joint debt, the divorce becomes a bit easier from the financial side.

2. Refinancing Debts into Single Names

Of course, it's not always possible to eliminate all the joint debts. If you cannot get rid of a debt before the divorce, it may be a good idea to refinance the debt into the responsible individual's name.

3. Come to a Fair Agreement, in writing

In some circumstances, it's not possible to refinance or pay off a joint debt. When this happens, put an agreement in writing stating which person is responsible for the payment. If you're the party not responsible for the payment, it's a good idea to keep a little bit of cash in saving in case the other partner cannot make the payment.

Use these tips and make sure the debts are split in a fair way. This will help to save some of the stress associated with your divorce.