Getting a Divorce and dealing with debt in the marriage.
In this week’s blog, we here at Consumer Debt Support (CDS) would like to take the opportunity and share a little more about the topic of when a couple comes to the decision of a divorce. What happens to the debt the marriage incurred and what to focus on during such a difficult period of separation.
The most common problem when dealing with a divorce, besides it being stressful and traumatic for both husband and wife, is the debt and the fear of how to handle all the outstanding payments and settlements on their own. The personal emotions and anxiety deprive couples from thinking straight, to control the financial stress thereof, and to deal with the psychological impact on them and the children involve, if any.
For many people going through these really tough challenges, its life changing overnight with the realization of moving apart. New addresses, the children’s life care and the financial maintenance calculations thereof. In some cases, spousal maintenance is included and also a priority and evidently, the start of a long stressful separation.
It is a psychical shock to face the new uncertainty alone, for most woman, being the house wife for years and out of the job market, inheriting half of the debt incurred of the marriage, with no income to pay those debts. They will need debt counselling guidance.
For woman over the age of fifty the changes are more intense. Unsure whether they will make ends meet, concerned of the next month expenses and forced to be the sole bread winner. It is difficult for both parties to adjust in such circumstances, and the financial burden could be shared with debt counselling and legal advice, instead of leaving it all unresolved or for last minute.
When the divorce attorneys start with the legal consultation to analyse the responsibilities and settlements between the parties, the importance of the debt becomes imminent. Having joint debt in the marriage must be discussed, and if together in debt review, consent order forms are needed. These are very stressful factors for consumers that have no idea what to do next, where to go and who to talk to.
Here is some useful information you should know:
1. If you are in debt review with a debt review consent order, bring it under the attention of the attorney.
2. Joint debt can be a tricky issue to resolve, therefore it is important to get the latest outstanding balances from all the creditors.
3. Submit a breakdown of all the relevant expenses going forward for both parties.
4. Consult with your attorney with regards to who bears the current expenses in the household until the date of divorce finalised and the legal conditions thereof.
5. When you married ANC with or without Accrual, ask your attorney for advice. As with accrual you have profits and losses to be calculated. Your marriage contract will be needed to submit.
6. Calculated payments to the debt review creditors, must also be resolved in the settlement between the two parties for if the debt defaults as per the order, the debt review could be terminated with even more complications.
7. Ensure that the complete financial agreement is in writing in the settlement of the divorce.
Going through a divorce is not easy and it comes with many emotions, fear, pain and anger. Don’t allow the debt to become the burden that you end up regretting after the divorce, or when settlement is reached to finalise the divorce and the debt is excluded from the divorce papers.
Here is a list of things that most likely will need attention:
1. Telkom change of ownership application.
2. Have two copies of the marriage contract.
3. The vehicles, insurance must be discussed going forward.
4. Inform all creditors of your new addresses as soon as possible to ensure mail is received if you are moving.
5. Get the latest outstanding balances on all the joint debt accounts.
6. List all the service payment agreements i.e.: DSTV, ADSL internet, Telkom, Mobile accounts, insurance, garden services, electricity and water accounts, levies accounts of the apartment, rates and taxes accounts and school fees or university fees of the children.
7. If married out of community of property you will need your antenuptial contract, for the lawyers.
8. Who was responsible for the debt payments in lieu of the debt review consent order? This is a discussion point for the lawyers to assist with proper legal advice, and to inform the relevant debt counsellor of the intended divorce.
Once the divorce order is finalised and there is a joint debt review order, ensure a copy is served to the debt counsellor. Should the debt review order be varied to exclude one party or even rescinded to bring two new debt restructuring orders before the court as the debt is now separated, the debt counsellor has the duty to ensure such changes. Should the divorce order state the debt review continue as is, it remains the responsibility of both spouses to ensure they get the final balance statements every 12 months, send the confirmation to the debt counsellor, who will update the PDA system involved.
Realising that a divorce is the mutual agreed next step to dissolve the problems in a marriage, no matter the reasons is extremely stressful.
When a couple for personal reasons can no longer continue with their married status, the debt should be the first uncontested issue to dissolve. Debt can become a financial burden after divorce, and it is important to address it before settlements are reached to finalise the divorce. Always remain mutual responsible for related financials to avoid prolonged conflicts.
Special note from the author:
If you are going through divorce, I wish you all the best during the process. You are stronger than what you think you are, stay focused and deal with it only one day at a time. May God bless you to make the right decisions.
Until next time