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What happens to debt review after a divorce settlement has been finalised?

Once your divorce settlement has been finalised, what happens to your debt counselling process that is currently in place can vary according to your personal situation.

Your marriage contract will have a large impact on what is done with the debt review process once your divorce has been finalised. If you are married in community of property, you will be under a joint debt review. This is due to the fact that your estate is viewed together as one single joint estate according to the law. Both you and your husband are therefore responsible for outstanding amount of debt, until your debt is finalised.

If you get divorced while you are under debt review and you have the debt review court order in place, then this will need to be rescinded and for new debt counselling applications to be started, as in order to follow on with the debt counselling process you will need to reapply, but will now need to be seen as two single applications. A new budgets and new proposals will have to be drawn up.

A debt counsellor will doing this by sending a change of circumstances form to all of your credit providers, explaining that you are going through a divorce and that the joint application will now be converted into two single application, with the relevant debt put onto each person's debt review profile.

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This can take time and will cost you more money due to legal fees, as well as potential debt counselling fees, if changes in budgets and proposals are required.

If you do not have a court order but get divorced whilst on the program, then you will have to advise your debt counsellor who will need to send a change of circumstances out to the creditors advising them of the divorce, along with a copy of the divorce order.

Please note that home loans complicate the process, as if it is a joint bond, both you and your husband would have signed surety and the bank that has given you the home loan will not care whether or not you are divorced. You will both still be liable for meeting the debt repayments and either need to adhere to those repayments or make an alternative arrangement.

If you are under debt counselling with DebtBusters, it is vital that you notify them about your divorce as soon as possible.

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