Divorce? Controlling The Debts
Posted on Thursday, November 12th, 2009 at 4:15 pmSummary:
If your getting divorced you’ll realise that the proceedings can often leave both parties dangerously in debt. The emotional side of divorce can be awful, but it’s the money side that can be one of the most taxing aspects of separation. And dividing up the debts from the marriage can leave a huge deficit in your available funds.
Since in financial and emotional terms the whole divorce process can be costly, there have been demands for a more sympathetic way to organising the separation terms. The “Debts and divorce campaign”, has been launched by the UK Insolvency Helpline to provide a organised approach in dealing with household online debt advice. This is good news as nearly two thirds of people questioned said that breaking up caused them more money problems than redundancy or losing their partner.
In the questionnaire, 30% of divorcees said that they required professional debt counselling, while 28% found it a strain to adapt to having just one household income. In fact 9% had major problems organising their debts and had to consider bankruptcy.
The research which was sponsored by the UK Insolvency Helpline, has decidedly demonstrated that the expense of divorce can leave people burdened with debt. 16% said they had used credit cards to purchase luxuries or holidays they wouldn’t have bought if still married. This kind of spending can create a very sore point during the divorce negotiations.
Only 8% of people said they were able to balance their finances during the divorce process and had arranged an amicable agreement. Of the seventy eight per cent of respondents who terminated their marriages amicably, most said that their finances now needed extensive review and makeover.
On average those divorcees who got in touch with the UK Insolvency Helpline had between £14,500 and £25,000 of unsecured loans, while 50% had debts of between £2,400 and £5,900, mainly as a result of the price of moving into a new home.
Many divorcees interviewed had entered into an IVA which is a easier alternative to bankruptcy whilst still resulting in greatly reducing debt levels.
When it came to functional information, many relied on the CBA, whilst some relied on colleagues and others went to counsellors or used support organisations.
A spokesperson for the UK Insolvency Helpline said, “We have released the Debts And Divorce Campaign to try and understand our callers’ spending trends. We can then assist them in planning for the future so that they should be able to keep their legal costs down as they are directed through the whole divorce process.”
