If your getting divorced you’ll see that the process can leave both parties deeply in debt. The emotional side of divorce can be unpleasant, but it’s the financial side that can be one of the most taxing part of separation. And dividing up the debts from the marriage can leave a huge deficit in your bank account.
Since in fiscal and emotional terms the whole divorce process can be expensive, there have been requests for a more understanding avenue to organising the separation terms. The “Debts and divorce campaign”, has been released by the UK Insolvency Helpline to provide a guided method in dealing with household debts. This is good news as 45% of people surveyed said that seperation caused them more financial problems than redundancy or losing their partner.
In the questionnaire, 30% of divorcees stated that they required professional debt counselling, while twenty eight per cent found it difficult to adapt to having just one household income. In fact 9% had sizable problems sorting out their debts and had to contemplate bankruptcy.
The study which was funded by the UK Insolvency Helpline, has decidedly demonstrated that the price of divorce can leave couples burdened with debt. 17% said they had used credit cards to purchase luxuries or holidays they wouldn’t have purchased if still married. This kind of spending can cause problems during the divorce negotiations.
Only 8% of divorcees said they were able to control their finances during the seperation proceedings and had arranged an friendly decision. Of the 76% of those questioned who ended their marriages favourably, almost all said that their finances now needed complete review and makeover.
On as a rule those divorcees who contacted the UK Insolvency Helpline had between £14,500 and £25,000 of unsecured creditors, while half of them had debts of between £2,300 and £6,000, mainly as a result of the expense of moving.
Many people interviewed had entered into an Individual Voluntary Arrangement (IVA) which is a gentler alternative to bankruptcy whilst still resulting in greatly reducing debt levels.
When it came to practical information, many relied on the Citizen Advice Bureau, whilst some relied on friends and others went to counsellors or used support organisations.
A spokesperson for the UK Insolvency Helpline said, “We have developed the Debts And Divorce Campaign to try and comprehend our callers’ spending patterns. We can then help them plan for the future so that they are better equipped to keep their legal costs down as they are instructed through the whole divorce proceedings.”
