How to Get Out of Joint Debt

According to a study done by NerdWallet, the average amount of household debt is approximately $131,431. This amount of debt can be extremely overwhelming for an individual to take on after losing a partner through separation or death. Although there are many ways to prevent debt from accumulating, reducing debt can certainly be a challenge for individuals that receive little to no income. Here is a guide for getting out of joint debt.

Review Your Income and Budget

Many consider the key to financial wealth as budgeting. By analyzing the income you have coming in and the expenses you are paying out each month, you will have a better understanding of what you can and cannot afford. If your monthly expenses exceed your monthly income, you may need to consider finding a secondary income and work on eliminating discretionary expenses.

Gather Your Debt and Asset Information

The first step to financial freedom is paying off debt. Whether you are working or not, it is important to regularly check on your financial health by performing a credit check or reviewing your credit report. This way you will know exactly what debts you are currently liable for.

In many cases, it may be difficult to determine what constitutes something as your asset and how to divide assets in regards to divorce or separation. Generally speaking, any belongings or property of yours that you have had before marriage and any gifts or inheritance you have received by a third party before or during marriage is considered your asset. When dealing with legal matters, it may be wise to consult with an attorney to discuss your debt and asset information in detail.

How to Remove Yourself From Joint Debt

Perhaps the most simple way to remove yourself from a joint debt would be to contact the lender and ask. Some lenders may actually be willing to work with you, especially if your spouse's credit was the main reason you were approved of the loan in the first place. Depending on the details of the loan, you may be able to remove yourself after a certain number of on time payments. If the debt involves paying off an asset that has a value worth more than the amount owed, you may be able to sell the item to pay off the loan.

If you are a victim of a fraud where you were forced into a loan without your consent, you should immediately file reports with the police, credit bureaus and the lenders.

If You Are Unable to Remove Yourself

Unfortunately, there may be a time where you are unsuccessful in getting out of joint debt. This is where the budgeting and debt and asset information may come in handy. You may want to consider different repayment options like refinancing, debt management plans, debt settlement, debt consolidation, or bankruptcy.