Divorce is a whirlwind — and it is an emotional rollercoaster — but often more so, on top of leading a mind-numbing process is dealing with the finances of a divorce. Not only do they have to split up assets, but there is also the complicating factor of joint debt. The mortgage, credit card bills, and personal loans — none of the financial obligations disappear when the marriage does. It can be so important to know how they will be taken with you both into the next chapter of your travels together.
Going through such a phase is really difficult, but the moment you put a divorce lawyer in Oakville by your side, things will get easier for you. They will not only ensure that you do not face the emotional challenges of divorce alone but also give you proper guidance on splitting the debts so you do not have the financial responsibility that is not yours to bear—and so that you can move on with a clean slate.
What Are Joint Debts?
Joint debts are exactly what their name suggests — debts that both spouses are responsible for, even if only one of them actually used the money. Debts can include everything from credit card bills to mortgages, car loans, and any other loans the pair signed for in the marriage. The spouse may not have even benefited from the particular debt, but they may still be liable for it under the law. It is part of the financial unity established in the marriage.
Determining who is taking responsibility for what after a breakup has its own added layer of pressure. Now, here is the positive flip side of the whole story: by knowing how to divide your debts, you can reclaim more control over the situation and prevent facing similar problems in the future. Let a divorce lawyer go to work for you in Oakville to sort it out, so it is fair and also above board.
How Are Joint Debts Divided?
Typically, this indicates that joint debts in Canada are split between the parties during the divorce. However, how they are divided can vary from case to case, depending on who created the debt, who benefited from it, and the individual circumstances of each spouse. If one half paid for a car loan that either car was used for each of the parties, he/she may be obligated to pay the loan off. However, if the loan was for something personal, such as a business loan, or something for which only one spouse was in need, they may be liable for such debts.
The court may go as far as splitting the debt between both parties straight down the middle, but this is not always the case. It frequently considers what each person can afford and their involvement in incurring the debt. This is where a divorce lawyer in Oakville can really help you out. This will ensure that no matter the circumstances, they will help make a division fit for you so that you do not find yourself in a case of too much to handle on your own.
What Happens If One Party Defaults on Payment?
This is one of the more complicated aspects of joint debt. So if you and your spouse have a joint debt, even if you have been granted a divorce and the settlement between the parties says that one spouse is responsible for paying the joint debt, the other spouse can still be pursued for the debt by the creditor. Why? Since the creditor does not always respect the divorce agreement and considers both parties equally liable for paying the debt.
This means that in a divorce agreement, one spouse must also take the lead in paying off the debt to protect Themselves. You may also consider taking steps to remove your name from any joint accounts or credit agreements, where possible. An Oakville divorce lawyer can ensure that you make these changes legally so that you do not later face liability for debts you do not owe.
What If the Debt Can't Be Fully Paid?
Sometimes, debts can feel so overwhelming that paying them off fully isn't possible. If this happens, it's important to discuss your options with your lawyer. There may be room for renegotiation with the creditors, or perhaps both parties can settle for a lesser amount. In extreme cases, bankruptcy could be an option, but it's something you'd want to explore carefully.
Whatever the case, it's important to approach this situation head-on so it doesn't keep you up at night. A divorce lawyer in Oakville will help you understand the full range of options available to you and ensure you make the right decision for your future.
Final Thoughts
Managing joint debts while getting a divorce can be tricky, but if you find the right guidance, you can take over this challenge. The crux of the matter is how the debts are split between you and ensuring your interests are safeguarded. Getting into the divorce process is complicated, especially the financial aspects, so it would make the most human sense to let a divorce lawyer in Oakville handle this side and help you focus on your new start in life.
Going through a divorce is tough enough without having to think about collective debts. With the right guidance, you can lighten that load and move on to the next chapter without the baggage of unprocessed debt behind you. Get some help—you don't have to do this alone.
