Debt management needs to be done properly in different kinds of life situations so that the stress of debt does not take out the joy of living.
Debt won’t leave you till you pay it. This is a fact of life that you should understand as quickly as possible. Once you have accumulated debt that is creating tension in your life and giving you sleepless nights, it is time to handle it with a firm hand.
There are many different life events that happen around you where debt follows you if you haven’t repaid it.
Ensuring proper debt management strategies will help you to take care of your life and that of your spouse and children in a better way.
The Art of Debt Management in Life
What Happens to Debt When You Die?
Life and death go together. If you have debt in your life, then in the unfortunate event of your death, your debt does not simply vanish. It needs to be paid. The debts you leave are paid out of your estate. Your estate includes money and property that you leave behind. If someone had a joint loan or agreement or provided a loan guarantee to you, s/he has to pay your debt. The right debt management initiatives can be helpful in taking care of this debt.
What Happens to Debt If You Get Married?
Getting married is a happy occasion. It fills your life with new experiences that you savour. However, having a debt hanging over the head of a spouse is a dampener. But, if your spouse has debt at the time of marriage, you won’t take it on just because you’re now married. If the debt is in your spouse’s name only, you won’t be responsible for paying it back. Moreover, your spouse’s bad debt shouldn’t have an effect on your own credit score. It is all about following a debt management plan that can help pay off the debt and not create a dent in your happily married life.
What Happens to Debt If You Get Divorced?
In the unfortunate situation that you and your spouse are getting a divorce, any debt that you or your spouse have individually or jointly needs to be paid. You should know that the person who signed the credit agreement is typically accountable for paying the debt. In the event of a divorce, both of you need to agree on how and when you both make payments on joint debt. It is also important to mention that it is crucial that both parties maintain communication with each other. You need to listen and understand if your ex-spouse is struggling financially. Getting the right debt management advice will be a great help here.
What Happens to Debt If You Move Abroad?
If there is a change in your life situation where you need to leave the United Kingdom and move abroad to another country, any debts you have would still be there. Your credit history may not follow you when you move abroad, but any debts you owe will remain active. Your lenders can’t take legal action against you as you would be in some other country. However, those same lenders will do their best and take action to recoup their debt. Getting in touch with your debt management adviser to consult on your debts before you move abroad may be the better option.
What Happens to Debt If You Declare Bankruptcy?
In the event that your accumulated debts have become unmanageable and you go bankrupt, you need to have the right debt management strategy in place. Bankruptcy is a legal status that lasts for a year. It can be a way to clear debts you can’t pay. Your non-essential assets (property and what you own) and excess income are used to pay off your creditors. At the end of the bankruptcy, most debts are cancelled.
We hope that we were able to give you an overview of how debt follows you in different life stages and how you need to take steps to tackle it firmly.
Do share your thoughts about this post below. You can even subscribe to our newsletter.