My wife and I split after years of putting up with her out-of-control spending that put us behind the 8 ball. We owe just about as much as we are worth, assuming we liquidate everything. My wife and I have good jobs, but if something does not give, we will be paying these debts forever. My parents tell me that they will help if I need it. Should I accept their offer?

While credit and debt problems are often overlooked during marital spending sprees, your settlement must include long-range debt management and planning. While bankruptcy is the last thing anyone wants on his or her record, personal bankruptcies are being filed at a record pace many because of divorce situations like yours.

We believe that you and your wife should first attempt to work through your problem. Rather than assigning certain debts to each of you to pay after the divorce, we suggest that you and your wife sell everything you have to pay your debts.

Why? Because if there is a joint account, as far as the creditor is concerned, each of you is fully responsible regardless of what the court order says. This means that if your spouse is obligated to pay a joint debt or a debt that you have incurred and doesn’t do so, the creditor can still sue you for payment. Sure, you can bring a court action to enforce the order, but what if your ex has left the state or declared bankruptcy? And what about the expense involved? That’s why it is important to look into how the debts incurred during your marriage will be divided and paid. The court cannot vary the terms of contracts you and your wife may have with third persons.

In the liquidation process, remember to always use net figures. For example, if a piece of property is to be sold for $50,000, remember the net received from the sale will not be $50,000, but $50,000 reduced by the costs of sale, the payment of your mortgage, taxes, and the payment of lawyer’s fees. And pending the sale, the monthly debt payments must be paid.

So when it comes to dividing up debt, you may want to consider the following if the sale of your assets won’t cover your liabilities: (1) Try to get security from the spouse who is obligated to pay the debt like a savings account or stock or guarantee from parents that will be returned or released when the obligation is paid, but which is available to be used if the obligation is not paid; (2) Consider purchasing a small life/disability insurance policy on the spouse to secure the obligation; (3) Think about getting the obligated spouse to refinance the account so it’s not in your name or so your property is not security for the debt.

REMEMBER:The filing of bankruptcy either during or after the divorce may affect your credit and disrupt everything you planned and paid for. Make sure to talk to your lawyer about this very important area of concern.

Bottom Line: We suggest that if your parents are going to help you, they do so by helping you get a loan to pay your share of the debts after your divorce, not before.