If you’ve ever been divorced you’ll see that the process can leave both sides dangerously in debt. The emotional side of divorce can be unpleasant, but it’s the financial side that can be one of the most demanding areas of separation. And dividing up the debts from the marriage can leave a big black hole in your available funds.
Since in fiscal and emotional terms the whole divorce process can be expensive, there have been moves for a more friendly way to sorting out the separation terms. The “Debts and divorce campaign”, has been launched by the UK Insolvency Helpline to provide a guided approach in dealing with household debts. This is good news as over a third of people surveyed said that seperation caused them more financial difficulties than losing their job or bereavement.
In the questionnaire, nearly a third of divorcees said that they required professional debt counselling, while over a quarter found it a strain to adjust to having just one household income. In fact 9% had sizable problems managing their debts and had to consider bankruptcy.
The research which was commissioned by the UK Insolvency Helpline, has clearly demonstrated that the expense of separation can leave people heavily in debt. Fifteen per cent said they had used credit cards to purchase holidays or luxuries they wouldn’t have bought if still married. This kind of spending can become a difficult issue during the divorce negotiations.
Only 7% of divorcees said they were able to control their finances during the divorce proceedings and had come to an amicable decision. Of the seventy eight per cent of respondents who terminated their marriages on good terms, the majority said that their finances now needed extensive review and makeover.
On for the most part those divorcees who got in touch with the UK Insolvency Helpline had between £15,000 and £25,250 of unsecured loans, while 50% had debts of between £2,000 and £6,000, mainly as a result of the costs of moving into a new home.
Many divorcees questioned had entered into an Individual Voluntary Arrangement which is a gentler alternative to bankruptcy whilst still succeeding in greatly reducing debt levels.
When it came to practical advice, many relied on the Citizen Advice Bureau, whilst some questioned friends and others went to counsellors or used support organisations.
A spokesperson for the UK Insolvency Helpline said, “We have launched the Debts And Divorce Campaign to try and comprehend our callers’ spending patterns. We can then develop a plan for the future so that they should be able to reduce their legal costs as they are directed through the entire divorce process.”
