by Rochelle Belnap, The AZCLG
Divorce hurts in many ways, but at least you can fix the pain to your pocket book. We consult with many people after a divorce. They all ask “How do I get out of debt? Do I have to pay this debt? Doesn’t the divorce decree matter?” Excellent questions. So, for this blog we will talk about what to do!
People have problems dividing debt, especially when they don’t hire or consult with a family law attorney. But even when you do, you might still have problems with:
- Credit Cards
Here is the bottom line, if the debt is in your name, you are probably on the hook. If your ex is supposed to make payments, and doesn’t – the creditor might come after you! Ouch.
Why do you care?
Your credit. If it is in your name, it is on your credit report. So when you try to apply for a credit card, a car, a house, or a job, these unpaid debts might be a big problem.
What are my options?
First, can you work it out? Before you get angry or open your checkbook, consider talking to your former spouse about paying the debt. Maybe they will be willing to get back on track with payments without you doing anything other than asking.
Second, consider debt settlement. That’s right, you may need to pay the creditor yourself. Yes, the divorce decree said your ex was responsible, but practically speaking you can’t do much with that piece of paper because you can’t make your ex pay. But you can settle then sue your former spouse to reimburse you for the money you spent on debts they were required to pay.
Third, consider bankruptcy. If the debts are too much, and you can’t reasonably settle without jeopardizing your financial future, then Chapter 7 Bankruptcy is not a bad option. If you are worried about the impact on your credit score, check out our blog and webinar on rebuilding credit after bankruptcy- you will feel better.
By the way, we offer free consultations to help you review your options and create practical plans. So don’t hesitate to ask for help.
To recap: You have options for dealing with your divorce debt! You can ask them to pay, pay your self, or file bankruptcy. Good luck!
Thanks for reading!