Going through a divorce is one of the most difficult periods of a person’s life. The emotional and physical stress of splitting up with a partner can put a lot of pressure on an individual and can impact every part of your life. However, when there are also financial difficulties to bear in mind, it can become even more complicated.
Even individuals who weren’t in the red prior to separating could find themselves in financial hardship when a marriage comes to an end. As circumstances change and incomes become squeezed, keeping on top of existing payments as well as additional legal bills, the cost of moving home and other expenses associated with divorce can become increasingly hard. Indeed, for people who already were in debt before the relationship breakdown, the impact could be devastating and exploring the best debt management solutions for them becomes a necessity.
During this economic climate, it isn’t uncommon for debt issues to not only make the breakup of a relationship more complex, but also can be the reason couples split up. For individuals who are facing the realities of being in debt after divorce, read on to find out what you can do next.
Moving out of the marital home
Often, the marital home will be where the main assets exist and can be used to pay off unsecured debt. However, during these challenging times, it can be a long and drawn out process, with things becoming even more complicated if one person is planning on remaining at the property.
For couples with joint liability – that means you both are on the mortgage – each party is liable for the full amount. If negotiations and agreements can’t be made on how you are going to meet the payments, then speaking to your lender to discuss your situation might be recommended. It is also worth pointing out that if you have a joint debt and the other person can’t repay the debt or enter bankruptcy, you could then be liable to pay back the full amount.
In instances where the house has been repossessed, lenders have a legal duty to look at the individual case of financial hardship. Approach your mortgage provider to explain your current circumstances and they could assess your income and expenditure to see if an alternative, more affordable repayment can be agreed.
Reduction in income
Divorces can also impact household income, with the majority of newly-single Britons finding their spare cash being increasingly squeezed. The drop in income, combined with the need to support two properties instead of just one, can soon mean that affording bills and meeting payments every month becomes a serious concern. For couples with existing debt problems, this imbalance of outgoings and money coming in each week will mean that it is only a matter of time before they are greeted with significant financial hardship.
No matter what is going on financially, it is only natural that parents are keen to cause as little upset and upheaval as possible for their children. Unfortunately, being a single parent can mean that outgoings soar with childcare to consider and additional mouths to feed from a single income. For the non resident parent who is struggling financially, meeting payments to support offspring can also throw up a number of challenges during the transition.
Single parents should look into any benefits they may be entitled to. For example, arrangements can be made about child maintenance to get additional support, while single parents can contact their local council to receive a 25 per cent discount on council tax.