Most people who get married don't assume that they will get divorced. Statistics show that around 50% of marriages in the US end in divorce, so it's a widespread occurrence for many couples. If this is your current situation, don't assume that your divorce decree will split up all your assets and loans up in the way you expect. Make sure to take adequate steps to protect yourself from future financial troubles and stress. When considering what to do, don't forget to think about ALL your financial assets. These can include cash, savings accounts, checking accounts, certificates of deposit and money-market accounts, to name a few. When it comes to divorce, these assets may be more critical to the non-working or lower-income-earning spouse. These could be crucial to cover some of their living expenses.
You should also be aware that lenders might not necessarily agree with everything you decide to during the divorce process. One spouse may be responsible for repaying individual loans after divorce, like a joint car loan or a home. However, they might not follow through and make sufficient payments, placing you in a complicated predicament. During the proceedings, the courts divide you and your spouse's debts and assets, deciding who is responsible for paying what. The goal is to make things as even as possible. However, the division of those assets can change that quite a bit. If you share multiple properties, whoever receives the most will have more debt obligations that the other.
When the judge hands down the divorce sentence and divides the debt, it can include credit cards, mortgages, auto loans, and medical expenses. Each state has its laws for dividing debts and assets, so be sure to have those in mind when going into court, as well as any prenuptial agreement you might have. If it all goes well and each one pays for things as they should, it's a lot easier to move on. However, if worst comes to worst and your ex-spouse encounters financial troubles, what happens?
Even if it's one spouse's responsibility to handle certain debts after the divorce, if it's a joint debt, you are still on the hook. This can include any defaults, late fees, or collection costs. It doesn't matter if you're no longer together; if your name is on loan, you are responsible. Lenders probably aren't aware of your divorce, and chances are they won't be particularly sympathetic. They are interested in the repayment of the loan. Including an indemnity clause within the divorce settlement will keep you on the safe side. You can also petition the court to demand that your spouse follows terms of the divorce agreement. This action could make them face fines or even jail time if they are unable to uphold it.
Now, if your ex-spouse files for bankruptcy for whatever reason, it can still affect you. Bankruptcy won't protect you unless you file for it as well. When a person files for bankruptcy to eliminate on a joint debt, bankruptcy court won't completely erase it. It only removes that specific person's liability for the debt. Your lender can still pursue the remaining debtor for the full amount. If that's you, then they will come looking for you. Your ex-spouse's bankruptcy can also affect your credit report, so that's something else to keep in mind.
Be through about closing all credit cards and lines of credit you share. Your ex-spouse can use those joint accounts to transfer their outstanding balances, or run it up and leave you liable to pay off their debts. Divorce proceedings are also notorious for identity theft. Be vigilant and keep all your sensitive information safe during the entire process to ensure you leave the process mostly unscathed.
The best strategy to avoid this headache is to pay off debt your debt before finalizing your divorce. That's often not possible, however, so the judge splits the obligations. The biggest challenge that people face when divorcing is the costs. Most often, they are due around the same time, making it hard to come up with the cash to cover those costs. People sometimes resort to racking up credit card debt to pay them off. However, the high-interest rates will only make your divorce more expensive. A divorce loan might sound odd, but it's often the easiest way to pay for your divorce. It's a personal loan that you take out to help you with the costs of divorcing. This problem can become even more complicated if you are divorcing with bad credit. If you are facing this unsavory scenario, there is a solution to come up with divorce funding. Here at GetCash, we understand how to to help people who need loans for divorce, who also have bad credit. Our vast network of lenders is here to help you with ways to finance divorce.
Unlike a credit card, a personal loan can be an excellent option to pay for a divorce. Here are some of the reasons for using a personal loan to pay divorce costs:
- You can borrow a significant sum of money: Many lenders can offer more money than what a credit card can, at much lower interests.
- You typically don't need collateral: You can find a lender that offers unsecured personal loans. This fact means that you don't have to provide any asset as collateral and can be super beneficial in a divorce. Your assets might be tied up in litigation, making it impossible to leave them as collateral.
- Having a fixed repayment schedule makes it easier to pay off: You'll know upfront when you're done paying off your debt. This fact eliminates the uncertainty of that debt hovering over you indefinitely. The repayment terms are also much more flexible, allowing you to have several years to pay it off.
- The funds are under your control: If you borrow money in your name after you've separated, those funds are yours and yours alone. Using assets in shared savings accounts can be challenging and in some cases, impossible.
Because of these benefits, using a personal loan can be preferable to many other alternative sources of funding for a divorce. Here at GetCash, we make it easy to request a loan with our simple and easy to complete online form. Once you fill it out, you can be connected directly with a lender, where they will then determine the loan amount, rates, and terms that you qualify. If you're approved, the lender will initiate the loan application process. Divorce can be an incredibly trying time, filled with emotional grief and financial stress. Our extensive network of lenders is ready and waiting to help make a clean break and help you move on with your life!
Check out our online form and see how you can use a loan for divorce financing!
This is not legal, financial or professional advice. Please consult a legal, financial or professional advisor for your specific situation.
*federalreserve.gov data for Q3 2019