Another very common reason that people go in debt is divorce. This is especially true if there are children involved. At first, if you haven’t been through a divorce, it seems like you could avoid debt. You may wonder what the big deal is, just split everything 50/50 and move on. Why all the debt, right?
Unfortunately, most divorces are far messier. This is true even if the spouses are getting along okay during the divorce. The reasons are many. One of the biggest issues is that your expenses can nearly double. Instead of maintaining one household, you are now maintaining two. That means two mortgage/rent payments, two electric bills, two water bills, two internet setups, two cable bills, etc. People often underestimate the economies of scale and economic efficiencies that come with marriage.
When children are involved, there will be even more redundant expenses that are ongoing. For example, let’s say you want to take your kids on a trip/vacation. Well, the other spouse may want to do that at some point too. So instead of going on one trip, getting one hotel room, etc., many of those expenses will be effectively doubled when the other spouse takes the kids on a trip. In theory, the kids benefit since they get to take two trips. But the reality is there are a lot more expenses involved.
These issues permeate every aspect of a divorcee’s life. Add to that divorce lawyer fees, asset buyouts under the decree, and many other administrative expenses and you start to get the picture.
Sometimes, debt problems are actually the cause of the divorce. You may have been rolling your debt forward during your marriage. Then, when things go south in the marriage and separation occurs, everyone throws their hands in the air and mentally checks out. Debt is often the last thing they are thinking about when the full emotional toll of a divorce comes to bear.
Whose Debt is It Anyway?
Another issue that can cause debt problems in divorce is the issue of liability. In Arizona, debts incurred during the marriage are generally the responsibility of BOTH spouses. There are some exceptions, but not as many as you might think. So that credit card that is in your soon-to-be ex-husband’s name…better be careful what he does with it. Spouses often separate physically without filing formal documents with the court that terminate joint debt obligations. Until a legal separation/divorce document is filed with the court, debts are still being incurred “during the marriage.”
This can come back to haunt the “responsible” spouse even years later. You could actually get sued, along with your new spouse, for debts your ex incurred during your marriage. Now, you may have defenses to that debt, but it can get messy.
If you’re about to go through a divorce, or recently have, and have debt issues, it’s important to consult an Arizona debt attorney to evaluate your best strategy. An ounce of prevention may be worth a pound of cure.
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