A divorce or separation is hard on the heart — and, often, your wallet. As your household divides into two, you might find yourself confronting debt from your previous relationship, plus the cost of post-divorce living.
The top 5 things you need to know about divorce and debt:
1. Shared debt is a risk.
A critical mistake is not immediately addressing joint credit cards or lines of credit. Allowing a former spouse to continue using these accounts can lead to new debt for which you are still legally liable.
❗To-do: Create a comprehensive inventory of all your debt — both joint and individual. Gather credit card statements and personal loan documents. Understand precisely who is legally responsible for each debt and its current status.
2. Single life is expensive.
Many people underestimate the true cost of living independently. This oversight can lead to financial stress, forcing you to use credit cards to cover basic needs.
❗To-do: Creating a new budget is one of the most important and overlooked steps of a divorce or separation. Meticulously track your new expenses, prioritizing needs over wants and identify areas where you can reduce spending to free up funds for debt repayment.
3. The details matter.
When was the last time you checked the details on insurance policies or reviewed your permissions for personal accounts? The end of a relationship is the best time to do any much-overdue financial housekeeping.
❗To-do: Not updating beneficiaries on financial accounts or overlooking the creation of a new, post-divorce financial plan can lead to future complications and potential debt. Meet with a financial planner to assess your assets and organize which accounts need to change (and which can stay put).
4. Build and rebuild your emergency fund.
You may have dipped into savings to help pay for the extra expenses associated with divorce. Your independence and stability matters now more than ever — so don’t wait to start saving.
❗To-do: Start rebuilding or establishing a new emergency fund. (We’ve got a great guide to get you started!)
5. Don’t hesitate to ask for help.
The end of a relationship can be the fresh start you need, but it can also be anxiety-inducing, overwhelming and terrifying. If you’re in over your head in unsecured, personal debts, don’t wait — get help now.
❗To-do: Talk to Accredited Debt Relief. Our program empowers people to get out of debt faster, with payments they can afford. See how much you stand to save every month by getting a personalized quote.
New money challenges often pop up during divorce proceedings, especially around unsecured debts like credit card bills or personal loans. But remember your strength. Taking charge of your finances and finding expert support are key to untangling financial ties and building new stability.
If you’re feeling overwhelmed by credit card debt or personal loans after separating, debt consolidation with Accredited Debt Relief can offer an affordable way out of debt.