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Why it’s important for couples to get out of debt

On Behalf of | Dec 21, 2018 | Divorce

Couples in Virginia might want to take steps to get out of debt. A survey from Fidelity found that more than half of partners are in debt when they enter a relationship. Of those people, more than one-third said money issues had a negative effect on the relationship, and almost half disagreed about which partner was at fault.

Couples may fall into debt for a number of reasons. For example, they might try to compensate for a failing marriage by spending money. Some may not want others to know that they are in debt, so they continue living an unsustainable lifestyle. Whatever the reason, it’s possible to pay down the debt. The first step is to be realistic about how much debt there is. People often underestimate how much they owe in student loans and credit card debt. Next, they need to decide whether they will use the snowball or avalanche method to pay off the debt. The former involves paying off the smallest debts first for the psychological boost while the latter involves working on the debt with the highest interest rate.

A prenuptial or postnuptial agreement may be a good idea to protect both people in case of divorce. Creating one of these documents can lead to more honesty between couples about finances.

Financial problems that cause the end of a marriage don’t stop once the couple decides to divorce. Even if there is a pre- or post-nuptial agreement that both parties still agree on, it won’t cover child support issues. Couples might need to negotiate this as well as property division and spousal support. In a high-net worth divorce, this can be a complex process. Thankfully, there are lawyers who know how to deal with such issues.