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A quick guide to the management of debt consolidation loan and divorce

Debt consolidation loan is incurred by individuals who are willing to pay off all their existing mortgages with varying interest rates and have one credit with a low-interest rate. Usually, the age group of such loan seeker is between 28-45years. 

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That is a majority of the loan seekers are married, and the debt amount is paid summing the income of both spouses. Hence when there is divorce among these debtors a proper evaluation, assignable debt amount is to be made by the court as per the particular countries rules and regulations. However, in the post-divorce phase, it becomes difficult for both the individuals to manage and repay their debts individually as the income is split and the share of the debt is comparatively high. 

However, the individuals can control their debts in the following ways

Analyzing income and debts

Post-divorce, it becomes essential to explain one's income and keep a proper track of all the expenses. As the income now is not as earlier and the budget is to be planned as per the new earnings and debts are to be paid off accordingly. Proper analysis of income gives a bright idea of the expenditures and also helps in to maintain a balance between income and liabilities. Income analysis also makes you aware of the prior basis in case more funds are needed to repay your debts.

Hiring an attorney or a debt settlement company

One of the wisest decisions can be hiring an attorney or a debt settlement company by the suitability of the financial situations of a divorced debtor. Both have their advantages and limitations depending upon how the debtor uses it. An attorney can guide you step by step in making all the financial as well as post-divorce legal decisions. He can always be with you to show you what is legally right or wrong. Also, he can assist you in filing allegations against some individual or a company in case of any illegal practice.

On the other hand, the debtor can approach debt settlement companies like national debt relief.com to seek guidance for debt settlement. These companies help the individuals to make a final solution of their loan at a reasonably low price or a meagre rate of interest as compared to their actual due amount. These debt settlement companies are specialised in the negotiating the loan amount with the creditors. In exchange for these services they charge a certain percentage of commission on the total amount saved by the debtor or may charge service charges for the same.

Paying a lower rate of interest and avoiding Bankruptcy:

As time passes debtors may find it really difficult to cope up with all the important expenditures and the liabilities to pay. In this case, he can choose to take the services of settlement companies to lower his interest rates as mentioned above. The debtor himself can submit his application to the financial institutions requesting to reduce his interest rate as he is genuinely unable to cope up with the same. The financial institutions may or may not agree to lower his interest rates, but they can come up with other solutions like giving grace time to pay off the debt. This will help the debtor to avoid the option of filing bankruptcy.

Having no future debts:

It is advisable for the debtors not to have any secured or unsecured debts after divorce as he is already liable to pay a handsome number of dues. Having future debts like credit cards or personal loans are just going to add up to the debts and increase the chances of bankruptcy; so, avoiding future debts is a must.

Safeguarding accounts:

It is important to safeguard bank accounts and credit cards post-divorce. Any of the ex-spouse can make wrong use of the authority and may lead to future debt. Hence all the possible areas where ex-spouse was assigned as an authorized user should be blocked, and authority should only be given to the primary account holder. This authorization can also be done through a simple phone call.

Filing bankruptcy

Acting as the last resort bankruptcy is the last option to clear off all the dues. To cope up with debt repayment after divorce might be really difficult for debtors who have to make ends meet and are struggling to satisfy their daily needs. In such situation filing a bankruptcy is the best and the last option for the debtor. Bankruptcy allows the debtor to do one-time loan settlement of pending dues in exchange of his assets or secured equities.

Divorce from a creditor's perspective

The debt consolidation loan is incurred in the name of either of the spouse. But after the divorce, the debt amount is liable to be paid by both the parties regardless of anything. The repayment process may also differ in different countries depending upon its laws and regulation. Many times, the final settlement of the loan taken during the marriage is very difficult for the creditors as the proper and accurate segregation of assets and liabilities is complicated and time-consuming. The financial institutions are anyway not bothered about who pays the debt they only want their debts to be repaid by the debtors. The financial institutions may agree to join hand with settlement companies if they are tentative about the payoff from any debtor. Also, they might even grant lower interest rates or grace time to pay off the due amount just to ease the process of debt settlement for both the debtors and from themselves.

Divorce can be really complicated when it comes to settlement of debt consolidation loan. However, and the legal orders play a vital role in recovering debts from both the spouses post-divorce. The court gives each spouse their share of liabilities after proper analysis of the couple's divorce case and debt status. Apart from the court the individuals also are advised to cooperate with the law and financial institutions in order to repayment of debts.
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