Debt is a family matter, especially when finances become tight and debt account head towards default. Although not everyone is affected by debt in the same way, debt and bankruptcy can have a lasting impact on the whole family. Before ending up in financial disaster consider a few important points about debt management and how it affects your family.
A Family Affair
Most people ignore their debts until they become a problem. Despite the obvious effects of this behavior, there are consequences for the children as well. Research shows that kids inherit the spending habits of their parents and are heavily influenced by how their parents manage money. Growing up in a family that does not prioritize saving or has difficulty staying out of debt is likely to set up children for the same patterns when they become adults. It is important that you set a good example for your children and talk about money with them. Get your kids involved in your financial matters and let them be part of the debt management process.
Debt In Marriage
One aspect of marriage is that money troubles can quickly put a strain on the relationship. Disagreements over how money is to be spent, overspending and delinquent accounts are all big financial stressors on a marriage. Further problems arise when debt management conflicts arise, especially when divorce is involved.
Dealing with debts in a divorce poses a unique challenges. Just like the assets and property, debts must also be divided among the spouses as part of the divorce decree. Jointly held debts, such as those accumulated together in marriage or that have both you and your spouse listed as responsible parties, are especially problematic. In many cases, jointly held debts will be divided equally as part of the divorce decree. Debts that were accumulated individually, before or during the marriage, are often assigned to the person solely responsible for those debts.
Filing for bankruptcy in marriage brings about the concern of whether you, your spouse or both of you should file. Typically, the person who holds the bulk of the debt liability should file for bankruptcy in order to protect the non-filing spouse from credit troubles. However, jointly held debts or those with dual party responsibility could leave the non-filing spouse at risk of credit collections or asset liquidation. In order to avoid jeopardizing the non-filing spouse, filing for bankruptcy together can protect all assets and resolve debts, regardless of their liability or ownership.
A Family Affair
Most people ignore their debts until they become a problem. Despite the obvious effects of this behavior, there are consequences for the children as well. Research shows that kids inherit the spending habits of their parents and are heavily influenced by how their parents manage money. Growing up in a family that does not prioritize saving or has difficulty staying out of debt is likely to set up children for the same patterns when they become adults. It is important that you set a good example for your children and talk about money with them. Get your kids involved in your financial matters and let them be part of the debt management process.
Debt In Marriage
One aspect of marriage is that money troubles can quickly put a strain on the relationship. Disagreements over how money is to be spent, overspending and delinquent accounts are all big financial stressors on a marriage. Further problems arise when debt management conflicts arise, especially when divorce is involved.
Dealing with debts in a divorce poses a unique challenges. Just like the assets and property, debts must also be divided among the spouses as part of the divorce decree. Jointly held debts, such as those accumulated together in marriage or that have both you and your spouse listed as responsible parties, are especially problematic. In many cases, jointly held debts will be divided equally as part of the divorce decree. Debts that were accumulated individually, before or during the marriage, are often assigned to the person solely responsible for those debts.
Filing for bankruptcy in marriage brings about the concern of whether you, your spouse or both of you should file. Typically, the person who holds the bulk of the debt liability should file for bankruptcy in order to protect the non-filing spouse from credit troubles. However, jointly held debts or those with dual party responsibility could leave the non-filing spouse at risk of credit collections or asset liquidation. In order to avoid jeopardizing the non-filing spouse, filing for bankruptcy together can protect all assets and resolve debts, regardless of their liability or ownership.