Going through a divorce will always be difficult. What’s worse is dealing with the additional pressure of outstanding debt. Working out how to split your debt can be very tricky.
22 April 2021 · Isabelle Coetzee
Going through a divorce will always be difficult. Dealing with the additional pressure of outstanding debt makes the process even worse.
Working out how to split your debt can be very tricky. We have outlined the main issues you should bear in mind, and how the debt division might best be achieved.
Tip: It’s never too late to have your debt consolidated into a single loan. Find out more here.
It all depends on your matrimonial contract
According to Stella Pickard, who has a background in law and is the CEO and co-founder of Quickwill, legally speaking, the division of your debt depends on your matrimonial contract.
The most common marriage types or contracts are as follows:
READ MORE: Marriage and Money: Notes for couples in customary marriage
Tips on how to divide your debt
While the above principles govern the split of debt, there are a couple of general points to also keep in mind.
According to Reagan Mitchell, director of WealthyMe, a marriage that ends in divorce can be a messy affair. When parties don’t agree, it can lead to increased legal costs and hurt family members.
“The best way to split the debt is to start with the asset division. You take the car plus the debt on that car. You take the house plus the debt on the house. It’s most important to reach an amicable agreement on the division of the estate as soon as possible,” says Mitchell.
He adds that people can make irrational decisions. The best course of action is to seek legal assistance. Highly-charged emotions are best removed from the process to enable a fair and logical asset split.
A debt counsellor can also assist you and your soon-to-be ex. Get your debt consolidated.
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