Can my creditors claim my divorce settlement

I have approximately £20,000 in credit cards debts. I have been in contact with a money advisor at out local traiding standards office. She has arranged with some the creditors for me to make a £1.00 token monthly payment. This is because I have to exist on Income Support and Disability Living Allowance. (The rest of the creditors have not replied to traiding standards.)

My (soon to be ex) husband has offered a divorce settlement of £35,000 if he can buy out my part of the house with a re-mortgage.

Some advisors I have asked about housing at local housing associations say that my creditors will demand £20,000 to settle my debts, leaving me with £15,000. This would exclude me from state benefits but would not last long to rent a roof over my head. My credit card debts and very poor credit record would prevent me from getting a mortgage. Also I suffer with chronic depression and fatigue so am unable to work at present. I am in receipt of Income Support.

I would appreciate some advice about my debts and creditors' claim on any divorce settlement money. Thanks.

Hello again.

Didn't see this post before replying to the other one about housing benefit.

Seems to me this may be another reason why a lump sum payment of £35K might not be a good idea.

I don't know how a creditor would react, and the trouble is the only way you could find out would be to disclose to the creditors the fact that you had received £35K.

If someone owed you £35K, and you knew that someone had
that sum, would you be inclined to take £20K ?

Needs specialist advice, this one. Again, see a CAB.

Mike

Zanth45,

As things stand then Yes, as far as i can see in your case the creditors could demand the 20k back.

Has the 20k debt been built up during the marriage from reasonable spending ? (ie not all spent by u on yourself since separation) in which case the debt is half his. So that should be considered when he makes his offer as the first 10k of the offer is simply him paying off his own debt. So in my book if it is not taken into account yet that the debt is half his then his offer should probably be 10k higher

Xanth

Sorry, on reading Downbutnot Out's post, I see that
your debts are £20K so you would have £15K left which
almost, but not quite, disqualifies you from means tested benefits.

I do not know nearly enough to answer the question as to
your liability for the debts. If you signed for them, then as far as the lender is concerned, you are responsible. But it can sometimes happen that responsibility for debts can be
transferred as part of a divorce settlement. If, for example, your husband kept you short of money and you had to borrow to survive, this is something which a Court might take into
account and might make you an award to compensate.

Mike

What bugs me is that my wife wants £40,000 of equity from the family home, £23000 of which will immediately go to pay her credit card debts. Not one penny of which was run up on the family.
Ultimately it wont be me that suffers but it will be the two kids who will have to give up everything so that I can afford to increase the mortgage to pay my ex wife's debts.
If I read one more time that the children come first I will scream, utter rubbish.

I am in exactly the same situation. Mine have been run up on things for stbx and even covered cost of our wedding on cards, his car when it broke down was repaired on credit card and to top it all off I even paid for his holiday which I thought he was taking alone to clear his head but actually took it with his girlfriend. During the whole holiday he contacted me for money everyday and left me and daughter without food. He promised to pay it back but I got £100 back out of £350 I sent to him while away. He then tells me he pawned our daughters inheritence from his late mother which gave him £500 for the holiday as well. I am looking at £35000 settlement with about £15000 worth of debt. Most run up after marraige.

The 20K debt was built up during the marriage and, while some was spent on myself, a large portion was spent on the children for clothing, shoes, birthday and Christmas presents etc.

Most of the debt was built up while I was studying at university as a mature student. It was difficult to make ends meet as I had to pay my course fees and my student loan was not enough. During this time, I always met at least the minimum payments and managed the debts myself. After university, I expected to find regular paid work quite soon and to be able to pay off my debts.

This did not happen, I could not seek employment because my depression and chronic fatigue worsened before the end of my course to the point where I have been too ill to work - even part-time. Also, my husband lost what was quite a well paid job and he chose to retrain as a teacher. We were having to manage on less than half the usual income.

My husband questioned me about whether I had any outstanding credit card debts, with the promise he would not be angry and would help me find advice as to how to pay off the debts. He questioned me to the point where I pannicked and felt forced to admit to my debts (I wanted to go on managing them myself but knew, in our circumstances 2 years ago, that I could not without help.)

At this point, 2 years ago, I had 10 credit cards! (Creditors would offer 0% interest, for 6 months, and encourage customers to transfer their balances from other cards. Also, making purchases from certain high street shops, you would be bombarded with offers of '15% off your purchase today if you take out a store card'. Any hint of reluctance and you would be pressured further and made to seem churlish for refusing. The cashier would suggest you could cut-up to card when you received it!)

After tranferring balances and agreeing to store card accounts I always thought I could destroy any unnecessary cards - but the pressures to spend and the temptations were always there. As I say, I ended up with 10 credit cards - I had not realised I had so many. My husband and I calculated to debt at £20K. We were both horrified in the circumstances. After this shock, it all seems a blur. I have destroyed all my credit cards - I don't have any and don't spent money I have not got.

We have had advice from CCCS and CAB/ local Traiding Standards. Now that I am separated from my husband, pending divorce, Traiding Standards Money Advice are in the process of negotiating token payment to all of my creditors. Only 5 have responded to this with acceptance - the rest bombard me 'phone calls throughout the day and evening. This is too much additional stress with the divorce process as well.

Going back to January 2008, my husband became fed-up with the lack of progress made towards paying off my debts. I had to borrow more money from my Student/ Graduate bank account overdraft in December '07 to help meet the costs of Christmas. (My husband had not allowed me enough money to get the children's Christmas presents - I could not make him understand how much these things cost.) I thought it would not matter, just to get us through Christmas and my husband need not know as it was my own private bank account - I would take responsibility. I just could not bear to see the children disappointed. I thought we could all start afresh in the New Year.

However, my husband opened my bank statement - by mistake he says - and was very angry and made me promise not to borrow any more money ever again. I promised and explained why I had borrowed from the overdraft. He seemed to accept this and we had a good, normal Christmas.

However, as New Year approached, my husband started to behave oddly and started to disappear at odd times. On 4th January '08, he announced he was taking divorce proceedings against me because, he said, he could not trust me anymore. This was a total shock because I had been honest about all my other debts, I had destroyed all my credit cards in front of him, I had taken advice from Traiding Standards and started to pay off the debts in small amounts. One small mistake and that was it - all over!! The debts were built up during the marriage due to difficult circumstances. I very rarely ever asked my husband to money up front - but he paid the household utility bills, mortgage because I was unable to work.