Debt is a way of life, and it can get complicated when marriage is involved. Unlike other types of marital property, debt is not a physical thing that you have to decide on keeping, like a house or a car. Here are a few strategies for handling the division of your marital debts.
- While perhaps not the most ideal way of handling your new postmarital debt, you can eliminate debts by using your divided marital assets. Suppose you are the one who ends up with a house or a car after divorce, but you don’t necessarily need that property. Or maybe you have a boat you never use, or some expensive jewelry that you never liked. Selling off assets to relieve debt may not be the most enjoyable thing, but easing the burden of debt using property you don’t need can make a reasonable dent in what you owe.
- Another option is to consolidate your debts. Taking out a loan to cover the costs of your credit card monthly payments may not be an option for everyone; after divorce, it can be hard to obtain an unsecured loan. In situations where you get denied a loan, you may have to branch out ”“ if you have a family member, for example, who has good credit standing, you may be able to enlist their help.
- If you have multiple cards with differing monthly payments, you might structure your payments by placing the highest priority on the smallest owed debt. Pay the largest payment you can on your smallest card, and the minimum on the rest. Once your first card is paid off, move on to the next, until you’ve cleared your debts entirely. Note: if you are pursuing this path to eliminate credit card debt, you need to stop using the cards or otherwise drastically reduce your reliance on them. This can be hard after divorce.
- The big one: negotiate. Unforeseen charges like medical bills can cost a lot of money and lead to a downward spiral of debt. But sometimes, insurance companies, especially in medical cases, are sympathetic enough to be open to a compromise. You might be able to knock off thousands of dollars in your debt just by negotiating a deal with your creditors.
You can get a head start on planning for your future finances by discussing your property division needs with a Denver divorce lawyer.