Divorce Debt Settlement
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Debt Settlement is done by Family Courts in varying manner in different states. If one of the spouses is failing to comply with the divorce settlement, these courts can take action. Debt Consolidation Loan is one of the good solutions to be discussed for debt settlements.
Role of Family Courts in Divorce Debt Settlement
The Family Court announces the distribution of couple's assets and debts as part of the divorce judgment. In these orders, the court specifies that which partner is supposed to pay what bills. The general tendency of the court is to distribute the debts equally.
However, the court may also intend to balance the assets and the debts. It is implied that the partner who is given more assets is allocated more debts.
Each state has made different laws regarding debt settlement. In some states, the assets and debts brought by each partner in the marital life are taken into account. In community property states, all that is related to marital life is owned in a 50:50 proportion. If there is a prenuptial agreement, this would certainly impact a debt settlement.
It is observed that although debts are allocated in a divorce settlement, any party may fail to repay the debts. Further, the creditors demand money from the spouse of the party. This is done to safeguard the creditor's rights. However, such an action seems unfair.
When your ex is not repaying the debt and the creditor is pursuing you, the best solution is to petition the Family Court to enforce the divorce settlement. Then, this court may ask your spouse for an explanation for not complying with the settlement. The court might fine the ex or imprison him / her. Another method is that you may repay the debt if it is economically feasible. However, you must retain an evidence of the payment. Further, you can notify the Family Court and request that your ex may reimburse you.
There are incidents in which the party cannot repay the debts and files for bankruptcy. The party must bear in mind that this filing does not imply that the spousal support and child support payments would get terminated. However, the Bankruptcy Court would prevent the creditors from harassing the party.
Opting for Debt Consolidation Loan in a Divorce Debt Settlement
Some divorcing partners have a huge onus of divorce debt. They find that they would have to disburse a considerable percentage of their income on loans, store cards and credit cards. The solution to such a problem is to avail a Debt Consolidation Loan. Such a loan has the following characteristics.
A Debt Consolidation Loan can be secured over the house. According to creditors, if any debt has accrued during marital life, both the spouses are responsible for it. By applying for a debt consolidation loan, the spouses can wipe off all debts. As this loan is spread over a long term, the monthly payments are lesser. However, eventually, the spouses realize that they have paid more interest.
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