How To Refinance After a Divorce
Money can do a lot of things. It can also buy a lot of things. Money enables people to buy both the things that they really need and the things that they just want. Unfortunately, it can’t buy everything cheap. It can’t buy happiness, love or a lasting relationship. Money is a big issue in many marriages especially now with the current recession that everyone is experiencing. As a matter of fact, money turns out to be the leading cause of divorces in today’s marriages. Unless a marriage is otherwise solid, financial problems can cause a significant damage to marriages and if not properly handled it can eventually lead to divorce. And so when a couple reaches the edge of their marriage and is considering the option of filing a divorce, one of the first steps that should be made is to protect one’s self financially. One of the most common problems many couples encounter when filing for divorce, especially when money is the main cause of their separation is debt responsibility.
During and after divorce, when money is tight and it is still necessary to spend some more, there are instances where there is no longer enough money for the couples to pay their other bills. This in turn can cause further conflict between the couple and make their divorce settlement negotiations very difficult. And so, to lessen the conflict that the couple might encounter, it will be very important to remember that all joint accounts of the couple should be cancelled before they file a divorce. But of course, these accounts are to be paid in full since any remaining balances on the couple’s joint account will still be their legal responsibility. However if the couple manages to separate their differences and agrees to help each other, the couple may come to an agreement that bankruptcy is the best option to resolve debts in order to get a fresh start financially after divorce.
By agreeing to file bankruptcy, the couple may ease the need to divide certain debts and can focus on establishing a new and separate credit profile after divorce. When negotiating a divorce settlement, marital debts and assets will be divided. But it is important to remember that if one divorces his or her spouse, their credit may remain connected for some period of time since divorce means nothing to creditors. Creditors usually do not remove a name from an account based on a divorce because it is not in their best interests to do so. If both spouses are legally responsible for a debt, the creditor may pursue both for payment. By removing the payment obligation for one of the spouses, creditors would effectively reduce their chances of collecting payment of the debt by fifty percent. During divorce settlement negotiations, requests may be made for spouses to have joint debts refinance. After a divorce, this serves to remove the liability from the spouse who does not take responsibility for a debt in the divorce settlement agreement thus protecting his or her credit.