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How to minimize chance of divorce caused by debt

On Behalf of | Dec 20, 2018 | Divorce |

Debt has become a way of life in many Connecticut households. Mortgage, credit card and student loan debts are all common. According to a recent study, more than half of all couples start out with debt, but the problem is that 40 percent of those say debt is a problem in their relationships. Many divorcing couples blame financial issues, including debt as one of the leading factors in their divorce. There are some actions that couples can take to minimize their debt and the stress on their relationships caused by it.

One of the first steps to dealing with debt is to determine how much a couple actually has. According to the Federal Reserve, Americans severely underestimate their amount of debt — by 37 percent for credit cards and 25 percent for student loans. The couple must gather all financial information so they can clarify balances, interest rates and other important information. From there they can develop a financial plan to get the balance paid off.

In order to get out of debt and stay out of debt, a couple must live within their means. This may include downsizing, giving up expensive hobbies or getting a more economical car. It is simple math that if a couple spends more money than they make they will acquire more debt, so frivolous spending has to be stopped.

A financial planner can provide useful advice on crafting a financial plan and attaining financial goals. As an unbiased third party, a planner can help settle differences of opinion the couple has regarding debt management before it negatively affects the relationship. A couples counselor can also provide invaluable insight into this situation by helping the couple reach a better understanding of each other’s feelings and needs and how to deal with the stress money puts on the relationship.

A Connecticut family law attorney can also be an invaluable asset. For couples not yet married, an attorney can prepare a prenuptial agreement that outlines the debt each person carries as well as who will be responsible for its repayment. For married couples that have tried unsuccessfully to overcome the damage that has been done to their relationship, experienced representation in a divorce is imperative. A knowledgeable attorney will protect a client’s interests and help that individual obtain the best financial outcome.