When it comes to settling a divorce, the most tedious part is always financial. There are years worth of investments, loans, mortgages, and credit cards left to be dissected and split up. With all of these things to consider, it can be tough to figure out exactly where to start. So we’re going to help you figure out how to split and settle debts during divorce. That way, you’re all set to move along, and start budgeting for your new life. It’s tougher than it sounds but you’ve got this covered.
How-To Split and Settle Debts During Divorce
Make a list
The best place to get rolling is by figuring out all of the debts you have. From mortgage, car loan, credit cards, the children’s medical bills, and so on. You should write everything down and the amount owed towards it. Having this all in front of you will ensure that you don’t miss something as you hash it all out. Believe me, you don’t want to have to do this again.
Start by Determining Personal versus Marital Debts
You have start by deciding what is personal, and what is joint. An example of this would be a medical debt, versus a mortgage on the home. Typically whatever is only in your name, will belong to you. When you determine what belongs to who, it’s time to start figuring out the marital debts and where to go from those.
Decide How to Settle Marital Debts
The largest marital debts are typically mortgages, car loans, and credit card debt. When it comes to the mortgage and the car loans, there are two solid ways to handle these. Option one: is that one of the two takes the house or the car. Therefore, whoever is keeping the property, becomes the only person on the loan or mortgage. You want it? You pay for it. For the second option, you can sell them. Take the money you make to pay off those debts, and make for a cleaner split. You can choose to go about it in any fashion, but these two typically make for the cleanest split.
Settle What You Can Before You Split the Rest
Financial uncertainty is the toughest part of divorce. You’re left with the emotional side of things, on top of not knowing where you stand on being able to provide for yourself. That’s why figuring out these debts as soon as possible is so essential. If you settle what you can before you split up the rest, you’ll be much better off for it in the long run. This will save you both from those unwanted conversations as you both make payments on an old credit card if you haven’t taken the time to fully settle debts ahead of time.