When it comes to marriage today, it’s common for couples to start out in debt. In fact, 86% of couples who got married in the last five years had a combined debt of at least $20K. However, if your husband or wife has substantial debt, it can have a profound impact on your marriage and financial stability.
In this article, we will explore what to do if you just found out that your spouse has a lot of debt and evaluate divorce as one option to protect your financial future.
Finances Matter. Here are some steps to take.
There’s no doubt that bringing debt into marriage can cause enormous strain. The larger a couple’s debt, the more likely money is one of the top issues they fight about. Almost half (48%) of couples with debt exceeding $50K are three times more likely to fight than those with less than $10K in debt.
Fortunately, there are steps you can take if your spouse has a lot of debt. Here are a few:
- Assess your financial situation: When confronted with your spouse’s surprise debt, it’s important to carefully assess the impact on your financial future. Consider the amount of debt, the interest rates, and your ability to manage or repay it. Evaluate how the debt affects your joint financial goals, personal finances, and overall quality of life. These factors will help you determine the best course of action.
- Establish communication: Engage in open and honest communication with your spouse about the debt and its impact on your marriage. By creating a safe space based on trust both of you can express your concerns, fears, and expectations.
- Make a budget: Together, create a comprehensive budget that accounts for all income, expenses, and debt repayments. Prioritize essential expenses and allocate funds towards debt reduction while still allowing for reasonable living expenses.
- Establish financial goals: Set short-term and long-term financial goals as a couple. These goals may include paying off debts, building an emergency fund, saving for future expenses, or planning for retirement. Having an understanding of your full financial picture can help you set clear objectives.
- Prioritize your well-being: Going through a divorce can be emotionally taxing, so it’s important to seek support from friends, family, or a therapist. By prioritizing self-care and focusing on rebuilding your life you can find a sense of personal fulfillment beyond finances in your marriage.
- Consider divorce: While divorce is a serious decision that should not be taken lightly, it may be worth considering if your spouse’s debt is unmanageable, continues to grow, or if you feel that your financial stability is at risk. Speak with an experienced divorce attorney to further understand how your current debt and future debt would be handled through a divorce. Divorcing your spouse may have some advantages if your primary concern is to protect your assets, prevent joint liability for your debts, and help you move forward with a clean financial slate.
If you find that divorce is the right option for you, then a skilled attorney coupled with a good financial advisor can provide objective advice. Legal matters related to spousal debt and asset division can be difficult to navigate. Understanding the complexities of divorce proceedings or other options can help you to make wise decisions during an emotional time.
Consider how the division of property, spousal support, and child custody arrangements will impact your financial situation. Create a long-term financial plan that takes into account your new circumstances, so you can start working towards renewed financial security.
Is There More?
As spouses, you share a life together and that includes financial responsibilities. But when one spouse has significant debt or continues to spend money, it’s easy to get deeper into debt. Start by communicating with your spouse to see if together you might be able to create a budget to resolve the issue. If possible bring in a financial advisor to help hold you accountable to a plan. Speak with an attorney so you understand how this debt might be handled in a divorce situation and if there are any steps you can take to protect yourself. And if all else fails, hire an experienced attorney to help you navigate the divorce process.
If you are considering divorce in California because of your spouse’s debt consider Buncher Family Law, divorce attorneys in Irvine, CA. With our extensive legal expertise and unwavering commitment to client care we will guide and support you while protecting you and your family’s best interests.