- Divorce rates 'driving debts up'
- inthenews.co.uk
- 14/07/2006 Make a Comment
- Contributed by: admin ( 61 articles in 2006 )
The rising number of marriages ending in divorce in the UK is behind the country's spiralling debt problem, according to a new report.
Financial advice firm Debt Free Direct claims that in 28 per cent of all bankruptcies, the underlying factor is an ex-partner's excessive debts, with people going through divorce proceedings a third more likely to suffer financial ruin.
Today's survey found that women are at a higher risk of having no option but to declare bankruptcy than men, with 14 per cent more female UK residents facing insolvency than their male counterparts.
In addition, women are 26 per cent less likely to qualify for individual voluntary arrangement (IVA) status, which could put off bankruptcy while debts are slowly recouped over a number of years.
Derek Oakley, spokesperson for the company, explained that in many divorce cases, individuals were wholly unaware of their ex-spouses' debts, with the majority of people understandably not making financial implications their immediate marriage priorities.
"Typically, people in a relationship will take on debts in joint names, 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," he said.
Mr Oakley went on to say that people do not take enough steps to limit their exposure to their previous partners' debts and excessive spending habits.
He added: "For example, even after divorce, many couples still hold credit or store cards in joint names. After separation it's important to advise the credit company to terminate the joint card. Unless you do this you could be pursued for payments on debt that your ex-partner has run up."
Financial advice firm Debt Free Direct claims that in 28 per cent of all bankruptcies, the underlying factor is an ex-partner's excessive debts, with people going through divorce proceedings a third more likely to suffer financial ruin.
Today's survey found that women are at a higher risk of having no option but to declare bankruptcy than men, with 14 per cent more female UK residents facing insolvency than their male counterparts.
In addition, women are 26 per cent less likely to qualify for individual voluntary arrangement (IVA) status, which could put off bankruptcy while debts are slowly recouped over a number of years.
Derek Oakley, spokesperson for the company, explained that in many divorce cases, individuals were wholly unaware of their ex-spouses' debts, with the majority of people understandably not making financial implications their immediate marriage priorities.
"Typically, people in a relationship will take on debts in joint names, 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," he said.
Mr Oakley went on to say that people do not take enough steps to limit their exposure to their previous partners' debts and excessive spending habits.
He added: "For example, even after divorce, many couples still hold credit or store cards in joint names. After separation it's important to advise the credit company to terminate the joint card. Unless you do this you could be pursued for payments on debt that your ex-partner has run up."
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