When a marriage comes to an end, it is always a tragedy. Of course the ending of the family unit and the emotional hardship for the children is the most difficult at the time of divorce. But the difficulty of separating one home into two can be challenging and tedious to say the least.

In addition to the management of the divorce, the household debt that was once shared as part of the family financial picture, must also be divided. In most joint credit contracts in Australia both parties are jointly & severally liable for the debt. So when the union splits up, the transition, from a financial point of view of your accounts separating, is not over night.

So one of the many issues to be discussed or managed is a plan on how to deal with the household debt. This is where emotions can get the better of people or a lack of awareness of not keeping up with these responsibilities in a timely fashion, that can have a NEGATIIVE IMPACT ON YOUR CREDIT FILE FOR UP TO 5 YEARS!

To put this into context, the oversight of not paying or perhaps abusing credit cards limits or trying to get one up on your ex will dog you for a considerable time after your relationship is no more.

Over the next 5 years your requirement for finance is likely to grow again through one reason or another. As a result of a dissolved relationship you will carry the poor credit burden.

Does an impaired credit rating stop you obtaining credit?   No! There are various lenders who cater to these sorts of situations. However it will come with an increased cost via interest rates and alike. And in a tightening credit environment, most lenders are becoming more & more particular in who they are prepared to lend money to.

However it pays to be mindful these sorts of solutions are not for extended period of time and are usually one component of a strategy to re-engineer your financial position.

In trying address some these scenario’s it may pay to consider some of the following:

Credit Card Limits – do they need to be cancelled or the limit reduced.

Budget – for 2 households, do the books balance?

Income – what & how you receive may change – support pensions, maintenance. How lenders view these may differ dramatically. What impact is it likely to have moving forward?

Remember most loans for a couple have joint & several repayment requirements. So if one party is not making payments the responsibility will be sort from you.

While this situation is most always challenging there are ways to deal with issues ahead of time and certainly if it has already taken place there are always differing solutions to assist in managing your finance requirements in the intermediate future.

Finance Know How is one who is willing to listen and provide some options for your consideration.