Controlling Your Finances During Seperation
If you’ve ever been separated you’ll see that the process can often leave both sides dangerously in debt. The emotional side of divorce can be taxing, but it’s the financial side that can be one of the most stressful aspects of separating. And tallying up the debts from the marriage can leave a big black hole in your finances.
Since in fiscal and emotional terms the whole divorce proceedings can be costly, there have been requests for a more friendly avenue to administrating the separation terms. The “Debts and divorce campaign“, has been launched by the UK Insolvency Helpline to provide a guided method in dealing with family debts. This is good news as over a third of people surveyed said that breaking up caused them more money problems than redundancy or bereavement.
In the questionnaire, nearly a third of divorcees stated that they needed professional debt counselling, while a quarter found it a strain to adjust to having just one household income. In fact nine per cent had sizable problems organising their debts and had to contemplate bankruptcy.
The research which was funded by the UK Insolvency Helpline, has decidedly demonstrated that the expense of separation can leave couples heavily in debt. Fifteen per cent said they had used credit cards to purchase luxuries or holidays they wouldn’t have purchased if still married. This kind of spending can cause problems during the divorce negotiations.
Only 6% of people said they had managed to control their finances during the divorce process and had come to an amicable agreement. Of the 77% of respondents who ended their marriages on good terms, almost all said that their finances now needed complete review and reworking.
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 creditors, while 50% had debts of between £2,000 and £6,100, mainly as a result of the expense of moving.
Many divorcees interviewed had entered into an Individual Voluntary Arrangement (IVA) which is a easier option to bankruptcy whilst still resulting in greatly reducing debt levels.
When it came to practical information, many relied on the CBA, whilst some questioned colleagues and others went to counsellors or used consultation organisations.
A spokesperson for the UK Insolvency Helpline said, “We have launched the Debts And Divorce Campaign to try and study our callers’ spending trends. We can then develop a plan for the future so that they are better equipped to keep their legal costs down as they are directed through the entire divorce proceedings.”