Debt and Divorce

Wednesday, March 16, 2016 - 18:30

Consumer Proposals, Bankruptcy, Debt and Relationships

When people get divorced, there are many unforeseen expenses that may lead you into financial difficulty. Household expenses essentially double, which alters your current financial situation and causes major money problems regardless of how much money someone makes or how well they managed their finances while they were in the relationship. Not only that, but you will still be responsible to pay for any joint debts that you have with your spouse. For instance, if your name is on a car loan or home mortgage you will continue to be held responsible post divorce for those debts.

If possible, think of all the possibilities and how to protect yourself in any situation that may arise once you are divorced. To do so you must:

  • Pay off as much debt as possible before filing for divorce
  • Make sure you are aware of all debt in your exs’s name, your name or both names
  • Add an indemnity clause to your divorce settlement agreement if needed
  • Make sure debt your ex is ordered to pay is refinanced

If you’re divorced and struggling to get out of debt on your own, then you need to take action to deal with your personal debt issues, stop the collection notices and prevent your creditors from garnisheeing your wages.

There are basically two options that I can offer to help you get out of debt and get a fresh start.

Making a Consumer Proposal
By making a consumer proposal you are able to stop interest, prevent creditor action, and compromise the total amount of debt you owe. Basically a consumer proposal allows you to pay-back an amount to creditors that you can afford.

File Personal Bankruptcy
If you can’t afford to do make a consumer proposal, then filing personal bankruptcy might be your best option. Filing personal bankruptcy will prevent your creditors from taking any further legal or collection action against you and will definitely be less expensive than filing a consumer proposal.

Either option, making a consumer proposal or filing personal bankruptcy would be a way of dealing with your personal debt issues and getting a fresh start.