Statistics suggest that there are over 2.68 million divorced people in Canada.
Breaking up with a spouse can be emotionally draining and distressing, but divorce is also a common cause of financial worries.
The process of divorcing a partner can be very expensive, and it can be made more complex by shared assets and debts.
In this guide, we’ll explore ways to overcome difficulties and build towards a more stable future after divorce.
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Dealing with financial problems
Money is one of the most significant contributing factors to divorces in Canada, but the anxiety doesn’t stop when the divorce is finalised.
For many people, it takes time to get back on track after a divorce.
A survey by Experian revealed that almost 60% of couples cited financial issues as a factor in their decision to split.
While money can play a part in tearing couples apart and causing friction between spouses, it’s very common for people who get divorced to struggle financially afterwards.
The cost of getting divorced is a factor, but there may also be additional concerns, including credit card debts, loans and a change of living arrangements.
The good news is that there are ways to recover and bounce back after going through a divorce.
With nearly 40% of marriages in Canada ending in divorce, it’s crucial to realise that help is available.
One of the most effective solutions for individuals struggling with debt after divorce is credit counselling.
Credit counselling can help you learn to budget and control spending, reduce and clear debts and improve your financial situation.
In many cases, a credit counsellor will be able to identify ways to pay off debts, and it might also be possible to lower the total value of your debts by decreasing interest charges.
Sometimes, if you’re in a situation where you can’t cover your debts, and your circumstances are not likely to change, it may be wise to consider options, such as filing a consumer proposal or bankruptcy.
A consumer proposal is an agreement, which is drawn up with a Licensed Insolvency Trustee (LIT) and presented to creditors.
It is an alternative to bankruptcy, which is mutually beneficial for the debtor and their creditors.
Complexities of debt and divorce
Going through a divorce is stressful enough without the additional worry of financial pressures and debts.
Unfortunately, divorce can complicate the process of dealing with debts, and in some cases, distributing assets and figuring out how to manage joint debts can be complex and convoluted.
If you’re going through a divorce and you have debts, or you’re worried about how your partner’s financial situation will affect you, it’s critical to enlist expert help.
You’ll need to look for an experienced, reputable law firm and it’s also beneficial to talk to financial advisors with expertise in this area.
Summary
Divorce is one of the most challenging processes you can go through, and it can be particularly difficult if there are debts involved.
If you need advice, don’t hesitate to contact us today.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Canadian Bankruptcies
How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?
