Marriage is meant to last forever. But unfortunately, that doesn’t happen always. The rate of divorce has increased in last few decades. There are several factors behind this separation. But whatever the reason is, an important thing to settle before the dissolution of marriage is the division of debts and property. Ironically, several times the divorce is a direct result of issues related to finance and debts. These loans could be of several types. These are mortgages on homes, debts on credit cards, car loans and several others that are required to be divided before separation.
Usually the best way considered to divide this debt is by dividing it equally between the spouses. But perhaps this may not prove ideal in all circumstances. An important thing to be taken an account is the financial situation of both spouses. You will consult a legal advisor in any geographical location (either a legal firm in New York or PRO services in Dubai) for this purpose. Not settling the debt in time creates several issues for both partners. Therefore, it is important to think seriously about dividing loan in a manner appropriate for both spouses.
Following are few important things to consider while dividing the debt before divorce. This will make things easier before and after separation.
Solve issues before Divorce
The relations between spouses during marriage as compared to after divorce can change abruptly. After divorce, it will become difficult for them to meet and engage in the way as they were doing so during their relationship. This type of situation creates several types of troubles and problems for completing unsolved issues. You have to be ready for several issues if you could not complete debt settlements before divorce.
Problems may arise in situations of major loans like car loans and mortgages as they are complicated and takes time and effort to solve. You may require removing your name from these loans which is a difficult thing to do after divorce. It is also possible that your ex-spouse may have filed bankruptcy. In this case, it is your responsibility to file bankruptcy separately in case of divorce. Therefore, it’s important to solve all such issues before divorce as it is the right time to get rid of such problems.
Act according to type of debt
You must be aware about various types of debt required to be paid by spouses and their responsibilities accordingly. Basically it is divided by community debt and separate property debt. Community debts are usually divided equally between both spouses. But in the case of separate property debt, it will be liable on the person that took that debt.
Therefore, you must be aware about the type of debt and whether you have to pay that debt or not. These include liabilities before marriage, after legal separation and after dissolution of marriage, medical bills etc. In these circumstances, spouses will pay their own debt and it will not be shared between them.
Pay whole debt before separation
It is not only important to settle the issue before separation but try to pay all debts before divorce. This is the best way to settle all debt issues related to your relation. It will keep you away from problems that may prove nuisance in later life.
Mona is working as a business consultant and content writer in a Dubai-based consultancy firm, Riz & Mona Consultancy. She has writing experience of more than 6 years. During her career, she has workedby writing for various business and legal subjects including debts, legal consultation, trade, finance, taxation, and others.