Announcement

Collapse
No announcement yet.

Stuck With The Debt

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Stuck With The Debt

    What can I do to help pay the debt I am going to be receiving after the separation agreement is signed? Can I have my spousal or Child Support payments lowered until the debt is paid off?

    I am basically being strapped with a line of credit of 20K, a loan of 15K and will be getting a second car debt of 35K. How is this fair just because I make more money than my ex but ironically not enough to survive on now.

    Is there not a stipulation in the courts that says that I can't be left destitute?

    Also, I thought all debt was marital debt. Because it is under my name I am being told that its my debt.

    What gives!!

  • #2
    Who told you this?

    Do you not have a lawyer?

    edit - I just read one of your old posts and you like to believe everything your ex tells you.

    How sad.

    Comment


    • #3
      Which part are you referring to? About the support payments?

      Comment


      • #4
        Originally posted by Bassix View Post
        What can I do to help pay the debt I am going to be receiving after the separation agreement is signed? Can I have my spousal or Child Support payments lowered until the debt is paid off?

        I am basically being strapped with a line of credit of 20K, a loan of 15K and will be getting a second car debt of 35K. How is this fair just because I make more money than my ex but ironically not enough to survive on now.

        Is there not a stipulation in the courts that says that I can't be left destitute?

        Also, I thought all debt was marital debt. Because it is under my name I am being told that its my debt.

        What gives!!
        I'm not sure where you got the idea that they should be under your name.

        In my case, the vast majority of the debts were under my name, because my ex didn't work for most of the marriage. But both her lawyer and mine agreed that they would be split evenly the same way assets are.

        The circumstance where they won't be split is if one of the parties attempts to rack up substantial bills before separation, or has a gambling addiction, or other issues that fall under reckless depletion of assets.

        But if those debts were incurred for valid purposes that benefitted both of you (living expenses, entertainment expenses, home improvement etc) or were standard expense like clothes etc., then they should be split 50/50.

        Comment


        • #5
          Do you not have your own lawyer to advise you of your rights?

          Comment


          • #6
            Yes I have a laywer. I am just looking for information from other people who may have gone through a similar situation.

            Yes all the debts were under my name because my ex did not make enough to get loans etc. I was able to secure loans due to my employment and my salary. These decisions were made together while we were married, ie: buy a car, buy some land, buy a trailer etc

            Comment


            • #7
              All debt amassed through time of marriage is divided, as are assets, at time of equalization.

              Have you not prepared and exchanged budgets and/or financial statements?

              Has your lawyer given you any advice insofar as "the process" you will go through?

              [I wish my ex would do everything I told him to do - would make my life alot easier]

              Comment


              • #8
                Yes we have exchanged budgets and financial statements. They are still being worked on. I haven't formally sat down to go through everything yet because everything is still going back and forth. But from what I am seeing, the debts are on my side of the column and not split. The only thing I can see is that so far my ex is not getting any of the pension. Maybe that's why I'm taking on the debt?

                Comment


                • #9
                  So while everything is "going back and forth" you are excluded from making decisions about how/when/when you lawyer communicates with opposing counsel?

                  Perhaps you have some sort of arrangement with your lawyer where he doesn't consult with you but just does everything for your final signature?

                  I can't help you if you can't help yourself. Maybe someone else can solve this riddle.

                  Comment


                  • #10
                    Originally posted by Bassix View Post
                    Yes we have exchanged budgets and financial statements. They are still being worked on. I haven't formally sat down to go through everything yet because everything is still going back and forth. But from what I am seeing, the debts are on my side of the column and not split. The only thing I can see is that so far my ex is not getting any of the pension. Maybe that's why I'm taking on the debt?
                    The debts and assets have to be split somehow. During the equalization process, each of you lists the debts in your name and the assets in your name. Something that's in both your names (ie, matrimonial home) is put half in each person's statement. Then whoever has the greater net worth makes an equalization payment to the other, so that you both end up with the same net worth.

                    If all the debts are in your name, but the assets are more evenly spread out between you, your ex will likely have to make an equalization payment to you.

                    If you don't like the situation where you get all the debt, don't sign it; negotiate something different instead. Now is the point where you are supposed to do that. Your ex has to pay her half of those debts one way or another, and the easiest way is to keep the debts in your name, and she gets less of the assets, so you both end up with the same net worth. If you buy her out of the house, she gets less than half, for example. Instead of getting half your pension, she gets less than half. Instead of each of you getting a car, you get both the cars. Whatever works out in your particular situation.

                    The problem with the pension being the asset you get more of in exchange for getting more of the debt is that it's not an asset you can access right away. Unless you are really attached to your pension, I would suggest finding other assets you can keep a greater amount of.

                    Comment


                    • #11
                      Thank you Rioe that is what I was looking for. Some negotiating tactics.

                      Comment


                      • #12
                        Assuming you both had nothing when you met...

                        After equalization (ie after implementing the separation agreement etc), you both should walk away with the same net worth - this includes considering all assets (including pension, houses), and debts.

                        What debts or assets are disposed of, or who keeps them, and an equalization payment from one spouse to another is how you achieve this equal net worth.

                        The first step is to put a value on all assets and debts. Then see what the total net worth is. You should each have half that net worth after separation.

                        Given the value of all things, and knowing who will keep what and what will be disposed of, you should be able to make up a fairly simple spreadsheet to determine what the equalization payment from one spouse to the other should be that would make each spouse to have the same net worth.

                        The lawyers may use their software, but it is important that YOU understand the relatively simple math behind it all so you don't get screwed. Once all assets/debts are evaluated, the math should not be that hard.

                        Your support payments should be based on both your incomes. It has nothing to do with equalizing your net worth.
                        Last edited by billm; 04-08-2014, 09:17 AM.

                        Comment


                        • #13
                          Hi billm. Thanks for the tips. I created a spreadsheet by copying the contents of the NFPS including the formulas. Relatively simple as you say. Now I am able to come up with various scenarios. It seems that my pension is tipping the scales. It now all depends on if they grab half of it. From what I can see if they don't take half of the pension then I owe her. If they do take it, she owes me, even if I take on all the debt or not. The pension is a significant chunk of change that is driving the numbers.

                          Comment


                          • #14
                            This was very similar for me because I worked at the bank and got staff benefits but the loans obviously had to have my name on them.

                            So in the end I kept all the debt but I also got all the assets.

                            My ex got to keep her car and her pension.

                            I got the house, the rrsp, my pension, the debt.

                            I had to refinance the house to pay the debt as part of the agreement.

                            So now I have the house and no debt.

                            If she kept the house and I kept the debt she would have owed me an equalization payment of $79,000.00 She couldn't afford that so she couldn't keep the house.

                            Comment


                            • #15
                              I think she is going after the house which for me means that she will owe me half of the equity from the house which will drive down the amount I have to pay her if they decide not to take the pension. So now I guess it boils down to keeping the pension or splitting it if they want it. Twenty years from now I might be happy that I took the debt on but retained every penny of my pension.

                              Comment

                              Our Divorce Forums
                              Forums dedicated to helping people all across Canada get through the separation and divorce process, with discussions about legal issues, parenting issues, financial issues and more.
                              Working...
                              X