This last situation happened to Fernanda Fletcher, a recently divorced woman from Worcester whose story was featured in WalesOnline. The 31-year-old ended up with £10,000 of debt to pay after the separation, due to shared credit cards and finance agreements. There was no money to split to cover the costs, so Ms Fletcher had to face up to tackling her half of the debt on her own. She said:
“It was only when we got divorced and I found myself with £10,000 of debt to pay on my own that it really started to weigh on me.
“The toxic debt really brought me down and I just kept feeling like I was paying for my past and not able to build my future like I would want to.”
How can debt after divorce be avoided?
If you’re currently going through a divorce or are just about to start proceedings, now’s the time to do your homework. You need to get a solid grip on how shared debts are dealt with by the divorce process, and understand which ones you’re liable for.
In a nutshell, here’s what you need to know.
• If you took out a joint credit agreement, you’re both responsible for paying off the debt.
• If just one person signed the credit agreement, they’ll usually be the one responsible for the debt. However, a court could decide that the other person financially benefitted from whatever the money was used for. This could mean that debts are divided up differently, and both parties could bear some responsibility.
• Joint credit agreements mean that you and your ex-partner are financially linked, even after the divorce. This means their credit history, and your shared credit history, can affect your ability to get credit in the future.
It’s crucial to try to pay off any outstanding debts as soon as possible. Ideally, you and your ex will make an agreement on how and when you both make payments on shared debts.
Maintaining communication and sticking to your obligations is crucial. It’s also important to keep a level head and avoid making rash decisions like shutting down a bank account – if it’s a joint account, you’ll both need to give your permission.
If your ex won’t pay their debts after divorce, this could leave you saddled with both the debt and the terrible credit score. To cope with this, contacting the lender, bank or building society should be your first step. You may be able to make lower payments, as well as putting restrictions on joint accounts so that your ex can’t rack up further debt.
Where to get help if you’re dealing with divorce debt
You don’t need to struggle with debt alone. Here’s where to turn if you need expert advice:
• Money Advice Service
• StepChange
• MoneyHelper
And for expert legal advice on getting a fair settlement, protecting your assets and ensuring you have a sound financial future after divorce – get in touch with Wirral divorce solicitor Tracey Miller.