Getting A Personal Loan To Pay Off Debt Complicated My Divorce

Getting A Personal Loan To Pay Off Debt Complicated My Divorce

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This as-told-to essay is based on a conversation with Ethan Hamm, a gay man in California who separated from his partner, Kyle Leon Henderson, after three years of cohabitation. It has been edited for length and clarity.

After our relationship got to the point where we realized we were better off as friends, we researched how to get out of a domestic partnership, and it was simple. In the state of California, you can have a petition for dissolution of marriage, which is a divorce – or you can have what is called a summary dissolution.

There is a whole checklist of things you must qualify as a couple to qualify for a summary dissolution. You must be under a certain amount of community property, under a certain number of years legally married, you cannot own property, and you cannot have any children. There were other reasons, but the only reason that prevented us from doing joint dissolution was that we had too much debt (called “community obligation”).

The community liability limit is $6,000. If you have less than that, you can do summary dissolution and get out of $65. Pay that and it takes three days to send the paperwork to Sacramento to file it. But if you need to go through a full divorce like we did, California has a six-month cooling-off period. So it’s the difference between finishing it this week and, depending on when you start the process, finishing it next year.

I took out a personal loan for debt consolidation

At the time we were housemates, we took out a debt consolidation loan of $25,000 from Lending Club in June 2022. The loan was in my name only, because we depend on each other. But he also bought a car, which was only in his name, and he opened a credit card.

So we separate everything, but in the state of California, it doesn’t matter. If you are cohabiting or married, then even if one person in the couple takes out a loan during the partnership – even if it is only in their name – it is still considered a community obligation and therefore the responsibility of the couple.

The loan was for $25,000, and it was taken out as a personal loan that we used for debt consolidation. We want to get our credit card debt under control. After moving from Alabama to New York City to Los Angeles, we got into debt from living expenses.

A loan seems like the easiest solution at the time

There are other things you can do for debt consolidation, but this seems to be the simplest and easiest way for us. Get a simple personal loan, put it in our joint bank account, split it in a way we decide is fair to both of us, then use it to pay off our debt.

And that’s the thing that locked our marriage.

When we became housemates, we had a door-to-door notary come to us, because it was the middle of the pandemic – it all cost less than $200. But because we can’t just do something simple like that to get a divorce, it costs more than a thousand dollars.

And that’s how low it is because we filed a no-fault divorce, we have no assets but debt, no child support, he owes me nothing, and I owe him nothing. If it’s a more complicated, more contentious process, it could be at least $8,000 to $10,000.

I don’t regret my choices, even if they were complicated

Looking back, I wouldn’t change a thing. There is no other option that can improve our situation. The reason we went for a domestic partnership was partly romantic and partly practical. Our 10 year anniversary of being boyfriends was on March 20, 2020, so we were five days into the world shutting down.

I realized that if one of us went to the hospital with COVID and had to make a lot of big decisions, our next of kin would be our mothers who both live in Alabama. We need legal documentation that says we can make decisions for each other. We were proud to do something practical that was romantically useful for our 10 year anniversary, so we did it.

So even though the divorce process is weirder and more headache-inducing than we thought, it’s not earth-shattering. We decided that we would have as much fun as possible with it – at the end of our six-month wait, we had a divorce party. We will register and everything because we are not registered as a couple. When we have to divide assets, we want gifts!

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