If you are considering a divorce or if you’ve already initiated the divorce process, you’re probably thinking about starting your new life and the newfound freedom that lies ahead.
However, while divorce might seem like a complete detangling of your life from your spouse’s life, there is one thing that will continue binding you to your ex-spouse until it is handled completely: your shared debt.
The Problem with Shared Debt
While you might see your divorce as a completely fresh start and a total separation from everything you once shared with your ex-spouse, the creditors to whom you owe money will not see it that way. Even debts that your ex-spouse initiated can be bound to you, depending on whether you signed on to the loan and other factors.
The fact is creditors are not going to simply wipe out your debt just because you are no longer married. From their perspective, it doesn’t matter. They just want their money.
What Can You Do to Eliminate Shared Debt?
A recent MoneyTalksNews explores the ways of getting disentangled from shared debt after divorce.
There are two important steps from the article that are particularly helpful in getting freed from shared debt.
First, close all shared accounts. Before your divorce is finalized, even before you file for divorce if possible, try to eliminate all debts in which you and your spouse are connected. “As long as you maintain joint credit accounts, you’ll be connected financially,” the article makes clear.
You can work together to pay off the debts, work out a new contract so you can be removed from certain debts and for the lines of credit you have to maintain, you could freeze the accounts so your spouse cannot rack up further debt on them.
Second, start building credit in your own name. The more you can do to maintain a solid record of payment of debts on your own, the more your own credit score will increase, giving you a greater degree of financial freedom.
Do not take the matter of shared debt lightly. If not handled properly, it could cause you to be linked to your ex-spouse for many years to come, which could result in significant financial burdens that could last for the rest of your life.