Divorce Affect My Debt Consolidation

After-effects of Divorce on Debt Consolidation

How Will Divorce Affect My Debt Consolidation?

A divorce can be lethal for your emotional and financial health. It can increase your stress level and jeopardize your plan to pay off debts with a debt consolidation plan.

Debt consolidation is a broad term people use to imply the following things:

  1. A debt consolidation program
  2. A debt consolidation loan

Let’s find out how a divorce can affect your debt consolidation plans and financial life. But it is always better to consult your divorce lawyer regarding this because he can guide you in the best possible way.

You should be extremely careful about the joint debts and the debts created by your spouse. Consult with a divorce lawyer before using this debt relief option in these 3 scenarios:

  1. When you have not yet consolidated your debts
  2. When you’re about to consolidate your debts
  3. When you’re thinking to stop the debt consolidation process

How divorce affects your debt consolidation process

Honestly speaking, it depends on the 3 factors:

  1. Types of debts you are consolidating
  2. How you are consolidating your debts
  3. Your state laws

You can consolidate only unsecured debts like credit card debts, payday loan debts, medical debts, etc. Always remember that.

How you are consolidating your debts

If you’re consolidating debts under a debt consolidation plan, then your multiple bills will be replaced with a single bill of low amount, and you have to pay it every month.

If you’re consolidating debts with a consolidation loan, then the scenario is completely different. Usually, debt consolidation loans are cash-out mortgage refinance loans. It takes almost 30 days to close refinance loans.

If you’re about to initiate a cash-out refinance deal, then it’s better to consult your divorce lawyer immediately. Ask if you should take out the loan. Ask if it will hurt you financially.

If your spouse wants to stay in the family home, then the cash-out refinancing can put the loan in his (possessor) name and he can buy out whatever equity you (non-possessing spouse) have in the property.

Can you consolidate debts and file divorce at the same time

Yes. You can consolidate your debts and file divorce at the same time. Much depends on the type of debts you have, state laws, and your spouse.

I know I’m repeating myself but can’t help it.

If you have joint debts, then both of you should split your monthly payments. For instance, it’s quite common for couples to use a joint credit card and having shared expenses. In that case, it’s completely normal to split the monthly payment. If your monthly payment under a debt consolidation plan is $250, then both of you should pay $125 each.

What if both of you decide to quit the consolidation program

If one of you decides to quit the program, then the other spouse has to make the monthly payments. That is one solution.

If both of you decide to quit the consolidation program, then unpaid debts will be clubbed with other debts.

If both of you decide to end the debt consolidation process responsibly, then you can sell your assets and repay your bills early. If you don’t wish to sell your assets, then arrange funds to pay off the consolidation program early.

How can a divorce lawyer help when you’re consolidating debts?

A divorce can help you in various ways. Let us discuss them in detail.

  • A divorce attorney knows the state laws in detail. He knows how the court may divide debts and assets in divorce cases as per the state laws.
  • A divorce attorney can help you if your soon-to-be ex-spouse refuses to participate in the debt consolidation process. Suppose, both of you have a joint credit card but you have hardly used it. Your spouse has used the credit card for his personal expenses. You haven’t used the card at all. In such a scenario, your spouse should pay for it. But what if he refuses to pay the bill? What if he refuses to send payments to the debt consolidation company? The divorce attorney can help you in this scenario.

A word of wisdom

A divorce decree doesn’t negate the original loan agreement. Never forget that.


It’s quite common for married couples enrolled in a debt consolidation plan to include joint accounts. It’s also seen that married couples put shared expenses on a single card in one spouse’s name. It becomes too difficult to allocate monthly payments in such scenarios.

If you’re in a debt consolidation plan and decide to file the divorce, then it’s better to talk with your spouse first. Discuss the possible ways to manage the cost of debt consolidation. If your spouse has used the card for paying medical bills or buying groceries, then it’s better to split monthly payments. If your spouse has used the card for a spa treatment, then he should make the monthly payment.

Your divorce lawyer can give you an idea about how the court would divide the cost of the debt relief plan. But it’s best for both of you to reach an agreement before the court makes a harsh decision.

Stacy B Miller is the content writer and editor at Oak View Law Group whose work has been featured in various blogs and websites. She works to eliminate the stigma of debt and show readers the best options for handling their own debt. Beyond writing about debt, Stacy enjoys cooking and traveling.

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