Divorce Fuelling Debt Crisis
The high divorce rate of recent in Britain is a major factor leading to ever increasing levels of debt, a new report claimed recently.
Debt Free Direct has claimed that the break down of marriages is a significant factor behind people’s financial problems, which suggests that many are forced to take out a debt consolidation loan following the completion of a divorce procedure.
The debt advisory agency has reported that those who are divorced are a third more likely to be declared bankrupt. Of those divorcees, women are running the highest risk.
Females are 14 per cent more likely to face financial ruin and are 26 per cent less likely to qualify for an individual voluntary arrangement, which can prevent bankruptcy.
Heavy debts that are incurred by an ex partner are a major cause of financial problems, even after a divorce, with Debt Free Direct finding that an ex’s excessive debts are an underlying factor in almost three in ten bankruptcies in the UK.
Typically, people in a relationship will take on debts in joint names with their partner, never believing that the relationship will end. But when it does the effect of divorce or separation can seriously heighten the impact of the debt problem, spokesman Derek Oakley explained.
Mr Oakley advised married or divorcing couples to take steps to protect themselves from the poor finances of their partner.
For example, he said, even after divorce, many couples still hold credit cards and / or store cards in joint names.
After separation it is important to advise the credit card company to terminate the joint card. If you do not do this, you could well be pursued for payments on debts that your ex partner has run up.
The report contradicts previous assumptions that debt levels are exacerbated by a growing consumerist culture and relaxed attitude towards credit.
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