Debt Settlement Solutions: Married vs. Single

Debt settlement solutions can vary depending on whether you are married or single, and on whether the debt is held in your own name or held jointly. The major issue when dealing with debt settlement as a married couple, for example, is how to deal with the situation when one spouse has bad credit and the other does not. You also need to consider the implications of having two incomes on the possibility of settling debt. 

Considering Debt Settlement Solutions

As a single individual, debt settlement tends to be a bit easier. You can:

• Consolidate debt, by taking out a new loan and using it to pay off old debts: The new loan should have better terms, a lower monthly payment, a lower interest rate, or any combination of the above. It can come from a bank, a credit union, a balance transfer on your credit cards, or from taking out a new mortgage o your home
• Settle debt: You'll have to fall behind on your payments and then your creditors may be willing to negotiate a deal and let you pay back less than the full amount you owe, as long as you start making payments again
• Declare bankruptcy: Depending on your income and the assets you have, you may be able to discharge debt entirely or renegotiate debt and pay it off over 3 to 5 years

As a married couple, you have many of these same options available to you, but things become more complicated. For example:

• If you file bankruptcy, you'll have to decide if you want to file on your own or jointly. If you don't file jointly, things can get very complex when it comes to whether joint property has to be seized and sold as part of a chapter 7 or not
• If you take out a debt consolidation loan or a mortgage on your home, you could be putting the other spouse at risk and transferring debt into his or her name that he wasn't responsible for
• When you settle debt, you hurt your credit- this could have an impact on your desire to make joint purchases, such as a home

Getting Help

Dealing with debt and trying to find a solution is complicated regardless of whether you are married or single. It is a good idea to get help from an experienced attorney who specializes in debt settlement, as your lawyer can help you to find the best option in light of your financial situation.