Debt and Divorce – How Financial Problems Break Relationships

It’s true that money can’t buy happiness, especially one shared between couples. But getting stuck in a quicksand of debt can hurt marriage in more ways than one, that’s why financial problems are often seen as the biggest reason behind the rising divorce cases in Canada. 

When people are pressed for cash, there’s bound to be some tension. After all, debt itself is a stressful problem, so coupling it with a divorce can make the situation feel insurmountable. With that in mind, what can couples do to treat debt issues at divorce? 

There are plenty of certified Credit Counsellors like Debt Helpers who can help settle your debt issues to ease the burden that often comes with divorce cases. Before pointing fingers on who should take responsibility for the debt, it’s best to consider the following first: 

What It Means to Handle Joint Debt in a Divorce 

Couples typically co-sign for the debt when getting a loan, line of credit, joint credit card, or mortgage together. This means that both parties who sign the debt contract hold equal liability, so both spouses have a responsibility to complete overdue payments. 

Nonetheless, the court plays a heavy hand in arranging the split between each spouse, particularly when the couples do not reach a debt resolution. Keep in mind that lenders or creditors will only focus on collecting debt, so the person’s name on the account will be held liable in their perspective.

If one or both parties cannot pay, then they are within their rights to pursue anyone who defaults. 

What It Means to Handle Individual Debt in Divorce 

As the moniker suggests, individual debts are specific to one person who signed for the debt. This means only one person is legally responsible for paying for any overdue debts and the lender cannot pursue the other spouse in the event of a default. 

Some examples of individual debts include personal loans, overdrafts, income tax debt, vehicle loans, and other payment issues made before or after the marriage. So long as only one spouse signs on the debt, then the other will not be liable for future payments. However, some couples may agree to pay a portion of the individual debt. 

Debt and Divorce: A Recipe for Disaster 

Divorce is rarely a smooth-sailing process but on top of dealing with child custody and other settlement agreements, having debts makes everything all the more arduous for all parties involved. 

Things can get messier as misconceptions result in couples arguing who is liable for paying the remaining debt and who should face creditors in a default. Instead of running around in circles with no clear solution in mind, talking with debt consultants should help separating couples settle matters as stress-free as possible. 

Where Can I Find Debt Consultants in Canada?

Dealing with finances can be tricky and emotionally draining, but it’s important to take the right steps to get you closer to financial freedom. Debt Helpers provide customized debt solutions for Canadians. 

We offer a range of consulting services and solutions designed to help you reach your financial goals and become debt-free. Learn more about our services today!