When relationships end it’s not uncommon to find that there are associated money problems. It’s one of the most frequent reasons for people contacting our charity. Debts which were once manageable are not longer affordable because two incomes have become one.
Statistics show that debt problems often increase the chance of a separation or divorce occurring. The most common reason for couples to argue is because of money. Read about the available debt solutions on our debt help page.
There are various reasons why people get into debt after a separation but we focus primarily on the routes to get the debts under control and become debt free again.
Debt Problems Because of Divorce
The average cost of a divorce is almost £13,000, although this depends on the complexity of the case. Debts may occur during the divorce proceedings because people use credit to pay for their divorce. Divorcing couples generally want the process to go through quickly and often turn to credit to cover the costs involved including legal fees etc.
After a divorce the two parties will often have a drop in income as there is going to be two separate homes and general expenditures. This means there will be two separate mortgages/rent and bills for each house. Also, credit may be used to pay deposits and costs for a new home i.e to buy furnishings.
It can be a very stressful and upsetting time for children once their parent’s divorce has been settled. Often parents will try to spend money on children via holidays, expensive toys and also days out. If these treats are bought using credit facilities, then this could lead to the level of debt increasing further.
Spending to boost self-esteem
The breakdown of any relationship can affect spending habits. Spending on more lavish items can increase self esteem and make people feel better for a period of time, however this will may mean more debt.
Any person that has gone from being in a couple and back to the world of being single again will experience a lifestyle change. There is going to be an increase in spending, such as more socialising. Going out with friends is an excellent way of dealing with the break-up of a relationship but this will be an added expense.
Existing debts whether joint or sole debts
Debts can sometimes be taken out in a sole name but couples may see this as a joint debt and both will cover the cost. However if the relationship does breakdown then the person who signed for the credit will be solely responsible for that debt. This may cause the person to slip into more debt if they can’t afford the cost of the monthly contractual payments by themselves.
Seeking Debt Help After Divorce or Separation
If you’re experiencing debt and money problems as a result of a separation or divorce then speaking to our not for profit money advisors could help.
We’re here to listen and provide confidential advice on your situation. Sometimes, just talking about the problems you face can make all the difference.
You can telephone our advice team on 0800 085 0226. We are not qualified to discuss legal matters relating to divorce, but can advise you on the debts. Some of the solutions which may be applicable include an IVA, Trust Deed or Debt Management Plan.