Debt and Divorce

[thebeachismyhappyplace2]

Hi
I’m planning to end my marriage, many reasons why and it’s long so won’t go into it now. But I wondered if I could pick brains about the financial side - the house is in my name so obviously that will get split 50/50 once we eventually go our separate ways however it just occurred to me we also have a couple of credit cards for total of about 25k which are also in my name (just because he’s always had rubbish credit rating). It’s been spent mainly on house renovations etc over the years. I’d like to think that the sale money of house would pay this off so that we can both start on a clean slate. However I’m aware that sometimes divorce can get nasty and messy so I don’t want to just presume he would be fair especially as it’s a lot of money. How does this work with divorce - would he have to pay half the debt or would I be liable?

Can you prove the spending on the card? If it was all on capital improvements then there should be no arguments about that being paid off before the remaining proceeds are divided.

well it won’t just be on house stuff, dental treatment and other life expenditures

Any debt during the marriage is settled as part of the split. Even if it’s in one name, doesn’t seem to matter what it’s gone on either. My partner has run up debt and additionally let it spiral out of control (not known to me) They are wanting a divorce but I’ll havd to pay half of the debt. If I had debt also, this will also be jointly paid off. In your case if you sell the house, it could be taken out of the capital and be paid, in full, from a joint asset?

I’m not sure what happens if the person with the debt has been built up through financial irresponsiblities as that is grounds for divorce itself? Perhaps someone with more knowledge will know this. Hope this helps. Good luck

Just before she left, my aunt took the credit cards and ran them all up to the maximum. She was a SAHM. She bought expensive gifts for friends and relatives, clothing and make-up for herself. My uncle ended up paying all the credit card debt because she had no income (other than alimony and child support). It took him eight years to pay it all off and his credit rating was tanked.

I divorced 7 years ago and there was a mix of house equity and unsecured debt (£32k). I had to take on the debt in full in order to keep the house, even though I wasn't even aware of most of it.

Thank you

Onering - was the debt originally in your dh’s name?

@Squeakyjoint

Any debt during the marriage is settled as part of the split. Even if it’s in one name, doesn’t seem to matter what it’s gone on either. My partner has run up debt and additionally let it spiral out of control (not known to me) They are wanting a divorce but I’ll havd to pay half of the debt. If I had debt also, this will also be jointly paid off. In your case if you sell the house, it could be taken out of the capital and be paid, in full, from a joint asset?

I’m not sure what happens if the person with the debt has been built up through financial irresponsiblities as that is grounds for divorce itself? Perhaps someone with more knowledge will know this. Hope this helps. Good luck

@Squeakyjoint I'm interested in what you've said there, as it's very different to what my solicitor told me. My stbxh built up a lot of credit card debt (over 20k) completely behind my back I had no idea whatsoever. I was only ever a cardholder and not the account holder. He also took out other cards that I had no idea about. Solicitor told me he is responsible for the debt- not me.

She's on leave atm- I'll be getting in touch when she's back!

I hope your solicitor is correct as this would be good for me. It would indeed be deeply unfair if I end up paying half a debt that’s not mine. Out if interest why do you assume the house would be 50/50?

@Squeakyjoint I hope I'm right but a bit concerned now! Every penny of the debt is in his name only as he is the account holder, but more importantly, I had no idea at all about it. I'm pretty sure I'll be able to evidence this. I definitely feel that morally I should be under no obligation- I was given no say in what was going on in our finances and was completely unaware so I'm going to fight tooth and nail to have no responsibility for it.

I wondered about the 50/50 thing too. Our house sold and I'm going for as much equity as I can get. If I find out I'm responsible for half the debt I want an even bigger chunk than I was going to go for! I'm resident parent so should get more. I'm offsetting this with his pension- he will have a large pension (I have very little but am young with plenty of time to arrange mine). I want to leave his pension and get more equity.

It is always up to the judge on the day if an agreement cannot be made between you and your husband prior. Unfortunately I speak from experience. If you are selling your house, try to get the debt paid before there is an equity split.

My former husband was financially irresponsible, all proved in court, I am responsible as his debt as his spouse. It doesn't matter what solicitors say, they can only guide in accordance with the law, if it gets to court, everything depends on the judge on the day.

Honestly - why do we get married?!!! 😩

It's a great question. I'd go for, because that's what we're conditioned for from day 1. It's the goal for many women.
And, in hindsight, wholly incorrect.

In our split, everything in one pot, including house equity, debt, pension cetv. Split 50/50

I just asked my DH if I can see bank statement to see where we are at with c/c debts. And he got really angry and defensive and turned it on me saying that I clearly don’t trust him and asked me why I need to know and that I must clearly be up to something! Then he stormed out ????!!! WTF!!

When you go to the mediator/solicitor- he legally has to disclose everything. If they are suspicious they can request his statements for three years

Just also be aware that both of you will have to have means to provide fit accommodation for your children. If he cannot afford this just on his earnings the left pension will be no use as this time. In addition the lender (assuming you have a mortgage) will have to be satisfied you can pay it. Doesn’t matter what the courts say. If you don’t earn enough and he cannot afford to pay both the marital home and his own accommodation, the house will be sold. Just make sure you financially disassociate yourself properly. I think this will be referred to as a ‘clean break’. Loads online, I’m no legal expert but have researched this extensively. The house should not have been sold really until legal processses had been investigated. If children are included it could be you get a 60/40 or even a 70/30 split?

Usually assets and debts are both taken into account in the financial settlement involved in a divorce. If you think you stbxh is likely to default if the debt is split I'd be proposing the equity from home sale first goes to pay out the credit cards and then remaining equity is split. Make sure you also consider pensions/superannuation if their is a discripency in how much you each have or in earning power due to things like being a SAHP. Not sure if kids are involved.

Yes have 2 kids. No pension.

Have you been earning in the time you’ve had children? If so is it regular PAYE or S/E? Sounds like you need some decent legal advice on all this.

I’ve been working part time on PAYE for last 2 years

So then you maybe in a different situation again as you work. Part time or not you still earn. I do know of a case (friend of mine) who divorced 2 years ago. 3 children ExH had an affair. He never saw the children much at all due to work etc. That ended up with a 70/30 split as she earned nothing for 10 years. You really need to look into this more. It seems you assumed it’s going 50/50 etc. What about access arrangements? Firstly you do need to see accounts especially if you jointly own the mortgage, you have a right to that. If he’s being secretive why? Get the mortgage information to see if any borrowing has happened without your knowledge (this maybe too late). My situation is different as I pay for everything (higher earner) my partner earns but not that much. Situation I accept. This is changing and my partner gets more secure financially. Debt was hidden from me and really spiralled out of control.