Managing debt after a divorce can be tough, emotional, and even infuriating–especially if you’ve been held liable for some of the debt your ex accrued. That being said, there are ways to overcome debt and find financial relief. Here are five things to know about debt following a divorce–for more information, reach out to our experienced Ohio attorneys at the Lawrence Law Office directly today.
You’re Responsible for Following the Court Order
Once a divorce has been finalized and debts have been split, you are responsible for upholding your end of the bargain and adhering to the court order–if you don’t, you’re in violation of the law. This means that even if you think that the way the debt was divided was unfair, you still have to pay it if the court has said you’re held liable for it. Not only could you face penalties from the court for failing to adhere to the divorce judgment, but you may also get into hot waters with creditors, too.
Before your divorce is finalized, it’s important to work with an attorney who can help you to negotiate a settlement with your spouse–or represent you in a divorce trial–to ensure that you aren’t unfairly burdened with debt.
Consider Restructuring Debts or Modifying Your Loans
If you are facing large amounts of debt after your divorce, one way to manage them is to try to restructure or consolidate your debts. You may also be able to work with lenders, such as your mortgage lender, to modify the term of your loan so that your monthly payments are smaller and more manageable. Most creditors would rather have you pay them–even if it takes longer than expected–than not get paid at all, which may be the reality for your creditors if you end up filing for bankruptcy. As such, they may be willing to negotiate or restructure your debts. If you need help with this, don’t hesitate to talk to an attorney who can represent you.
Make Sure You Don’t Accrue More Debt
When you’re already facing debt, your number one priority should be to make sure you don’t take on any new debts. Not only will you need to pay attention to your spending, but you should also make sure you’ve changed your credit cards and taken your ex’s name off of your bank accounts so that they don’t have access to your funds or your lines of credit. The last thing that you want is for your ex-spouse to accumulate more debt that you’re liable for.
Put a Budget in Place
It sounds simple, but putting a budget in place is one of the most effective ways to make sense of what’s happening with your money, start paying down debts (which should be a top priority), and saving for the future. You can create a basic budget using a spreadsheet–or even a pad and paper–to track your expenses and your income. You can also use a budgeting app. If you are spending more than you make, that’s a problem. Look for areas where you can make sacrifices and cut back.
Consider Filing for Bankruptcy
If you aren’t able to cope with the debt that you owe after a divorce and you have explored other options, like consolidating your debt and modifying your mortgage, another option may be to file for bankruptcy. Filing for bankruptcy is a big step and a choice that will have consequences; however, it may be the only way to get financial relief if you are far behind on debts otherwise and can’t catch up.
Note that in some cases, filing for bankruptcy prior to filing for a divorce is recommended. If you haven’t yet filed for divorce and are thinking about divorce and bankruptcy, talking to an attorney who can provide you with guidance is advised.
Call Our Ohio Family Law and Divorce Attorneys Today
Rather than waiting until after your divorce is completed to figure out your debt, it’s often wise to get a handle on your debt and how you will manage it before your divorce is settled. In some cases, filing for bankruptcy as a married couple before a divorce may even be advisable and in all cases, ensuring that you get a fair shake in terms of your divorce settlement is a key part of avoiding excessive debt after a divorce.
At the Lawrence Law Office, our Ohio family law and divorce attorneys can help. To learn more, please reach out to our law firm directly by phone or online. We can start working on your case immediately.