Debt and Divorce in Canada

About 38 percent of all marriages that took place in 2004 would have ended in divorce by 2035, Statistics Canada reports. That’s about four in every ten marriages that will end in divorce. The result? Those experiencing marital or relationship breakdown will often find themselves out of financial support, with many ending up with debt.

Bankruptcy and assets

If you were bankrupt before the divorce, then your assets will be considered a part of the bankruptcy estate. This will mean surrendering the assets to a Licensed Insolvency Trustee. However, if you divorced before you filed for bankruptcy, then whatever assets your spouse has should not be affected.

Co-signed debts

If you incur debts as a couple, then both parties will be held responsible for paying off the loan. Debts only become joint if both parties sign for the debt. After the divorce, the debt may be split equally and both parties may, in the eyes of the creditors, still be liable to pay the full debt if the other party defaults on the payments. If your spouse fails to hold up his/her end, then you’ll want to fully understand what your responsibilities are to pay the full amount of the debt.

Getting help

If you’re divorced, or considering a divorce and find yourself struggling to make payments on your debt, look for help. At 4 Pillars, you can learn all about debt restructuring plans that can help you get out of this financial quicksand. By reaching out to a debt counselor or consultant, you can discuss your case. Talk to them and find out what you can do to improve your situation.

Handling debt

Living with debt is hard. But getting help from debt restructuring firms can help you move forward in the right direction. You may need to pay a small fee, but the tradeoff you get will be more than enough. With a restructuring plan, you won’t have to be at a loss on how to manage divorce and debt. You can start paying off your debt and start making positive changes in your life.

Handy tips and advice

Take it easy. Divorces are among the most emotionally charged cases in court. The thought of tackling divorce and debt on your own may seem hard. Don’t let it discourage you, though. When things seem insurmountable, take them one day at a time. Be kind to yourself. This, along with help from a debt management expert, can do a lot to improve your experience. Things won’t be perfect, and it won’t make your debt go away, at least not yet. But it can help make things easier. To know more, contact us at 4 Pillars.