More and more divorcing couples have unsecured debt issues: i.e., debt that is not secured against an asset. Although debt can be a significant issue for married couples, it becomes a much bigger problem to deal with in separation and divorce.
You may already know what you owe. However, if your spouse has been secretive about your financial affairs, you may be totally unaware of how much debt is involved. Your first step should be trying to determine what you're dealing with. You should always consult a lawyer with respect to debt that you were totally unaware of to determine if you will be responsible for a share of it.
Debts that are secured against an asset – e.g., a mortgage, car loan, etc. – should usually be retained by the spouse retaining the associated asset. Unsecured debt is often more difficult to deal with.
There are really three options when it comes to dealing with the debts of a marriage with respect to the decisions about dividing the matrimonial property.
To paraphrase Nike, "just don't do it!" Instead of agreeing to share a given debt equally, divvy up the debts in some roughly equal fashion according to the matrimonial property laws. Your goal is to finish with a list of debts for which you have sole responsibility, and a separate list of debts for which your spouse has sole responsibility.
It can be very complicated. More importantly, separation and divorce will provide you with a new beginning. Whether you and your spouse accumulated debt together, whether your spouse accumulated debt behind your back or whether it was your own spending habits or lack of funds that created the debt issue, now is the time to work it all out. It may also be time to learn new habits including the art of budgeting, the ability to say I don't need that, etc. Do not berate yourself for your lack of involvement, at this most stressful time in your life. Your mental health is likely not equipped to take a self-beating. Every mistake is an opportunity to learn, seize this opportunity and put your financial future on the right track!
Sharon Numerow is a Certified Divorce Financial Analyst® at Alberta Divorce Finances in Calgary. She can be reached at 403-703-7176 or Sharon@AlbertaDivorceFinances.com. View the firm profile here and firm website herewww.AlbertaDivorceFinances.com.Back To Top
Certified Divorce Financial Analyst
Business Valuators / CPAs