Summary.
If you’ve ever been separated you’ll understand that the process can often leave both parties dangerously in debt. The emotional side of divorce can be draining, but it’s the money side that can be one of the most demanding aspects of separation. And dividing up the debts from the marriage can leave a big black hole in your bank account.

Since in fiscal and emotional terms the entire divorce process can be expensive, there have been demands for a more sympathetic approach to administrating the separation terms and eliminating your debt. The “Debts and divorce campaign”, has been launched by the UK Insolvency Helpline to provide a structured approach in dealing with household debts. This is good news as nearly two thirds of people surveyed said that breaking up caused them more financial difficulties than losing their job or losing their partner.

In the survey, nearly a third of divorcees stated that they needed professional debt counselling, while twenty eight per cent found it a strain to adapt to having just one household income. In fact 10% had sizable problems sorting out their debts and had to consider bankruptcy.

The research which was funded by the UK Insolvency Helpline, has clearly shown that the expense of divorce can leave people burdened with debt. 15% said they had used credit cards to purchase holidays or luxuries they wouldn’t have purchased if still married. This kind of spending can become a difficult issue during the divorce negotiations.

Only 8% of people said they had managed to control their finances during the seperation proceedings and had arranged an friendly agreement. Of the seventy eight per cent of respondents who ended their marriages on good terms, most said that their finances now needed thorough review and reworking.

On for the most part those divorcees who got in touch with the UK Insolvency Helpline had between £15,250 and £25,000 of unsecured loans, while half of them had debts of between £2,200 and £6,100, mainly resulting from the price of moving into a new home.

Many divorcees quizzed had entered into an Individual Voluntary Arrangement (IVA) which is a gentler option to bankruptcy whilst still succeeding in greatly reducing debt levels.

When it came to functional advice, many relied on the Citizen Advice Bureau, whilst some turned to colleagues and others went to counsellors or used consultation organisations.

Mr Hattersley Thomas, a spokesperson for the UK Insolvency Helpline said, “We have released the Debts And Divorce Campaign to try and study our callers’ spending patterns. We can then develop a plan for the future so that they are able to reduce their legal costs as they are directed through the whole divorce proceedings.”

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