SoFi

If you’re getting divorced, one of your concerns will most likely be how the divorce will impact your personal finances. Although each case is unique‑and this article should not take the place of consulting an attorney—this post will share helpful information and important questions to ask as you navigate the divorce process.

One commonly asked question is: “Am I responsible for my spouse’s debt after separation?” The answer to this question will vary, depending upon your personal circumstances and the state you live in. States generally follow either community property rules or common law property rules.

Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you live in Alaska, you and your spouse may have signed an agreement making your assets community property, but if you didn’t sign this agreement, Alaska follows common law property rules—as does every other state excluding the nine states that adhere to community property law.

The rest of this post will share more information on the distinctions, as well as some answers to other questions about divorce and debt responsibility. We’ll share strategies for consolidating your debt through personal loans, refinancing your student loans in your new name (if applicable), and much more.

Community Property vs Common Law Property Rules

If you live in a state where community property laws apply, both spouses are typically responsible for debts incurred while married. In fact, most debts are considered to be the responsibility of the “community” (the two married partners) even if only one of them signed the paperwork.

After a legal separation takes place, debt in these states is typically owed only by the person who took on that debt. Exceptions are made if the debt was taken on, pre-divorce, to maintain a joint asset, such as a new HVAC system on a home; if what was purchased was needed for family necessities; or if the couple keeps joint accounts.

But what if one or both members of a married couple took out student loans before the marriage? In this case, the debt very well might not be considered part of community debt, although it could if the spouse signed on as a joint account holder.

If your state follows common law for property , debts taken on by one spouse are, typically, solely that person’s debts. Exceptions can include ones that benefit the marriage, such as childcare, food or clothing, and shelter or household items considered necessary.

Both parties are typically responsible if they both signed a contract agreeing to make payments, or if both names are on a property title to property or a shared account. This can also be true if both spouses’ income was considered when a creditor was making a lending decision.

End of Debt Accrual

A crucial question to have clarified is when, exactly, during the separation/divorce process will you stop incurring marital debt in your state? In California, as one example, a person stops being responsible for his or her spouse’s debt on the date they separate. Every state is different so it is best to consult with an attorney.

Note that, even though state law may draw the line on your liability for a spouse’s debts because of separation or divorce considerations, creditors may still have a legitimate case for pursuing payment from you if repayment of the debt falls behind.

Plus, let’s say that according to the divorce decree, your soon-to-be ex-spouse will be responsible for payments made on a credit card. If your name is on that credit card, the court would order your ex-spouse to make payments—but, if he or she doesn’t actually make the payments on time, it can still affect your credit in a negative way.

Talk to your attorney about options available to get your name off of any accounts with debts assigned to your ex-spouse, including having your ex-spouse refinance the loan so that it is solely in his or her name. You and your ex-spouse could agree to each ask creditors to remove one another’s names according to the dictates of the divorce decree, but creditors are not required to comply.

In response to your request, a lender could, for example, ask you to apply individually for credit to see if you can manage the debt based on your income and credit history only; if satisfied with your ability to repay the debt, the lender might agree to remove your ex-spouse’s name. If one spouse has higher income and/or better credit history than the other, requests might be approved for one and not the other, making the situation more inequitable.

Additional Considerations

Courts may assign debts that are considered necessities to the party believed to have the ability to pay them. This may or may not be divided equally, especially in common law property states where the goal is equitable division, rather than equal division of property.

No matter which one of these legal structures your state follows, debt typically follows the asset. In other words, if you get a car, you’ll probably also be responsible for paying it off. This also means that, if you end up with more property than your ex-spouse after the divorce, you may be taking on a greater percentage of the debt.

If you and your spouse signed a prenuptial or postnuptial agreement that lays out division of debt in case of divorce, your situation probably won’t mirror the typical divorce in your state.

Because laws about divorce and debt responsibility differ by location, it’s important that the attorney you consult is experienced in the laws of your state. Some couples find that using a mediator to amicably divide debts and assets is preferable to having a judge make the calls. Some mediators are also attorneys, which can be helpful.

Managing Debt After a Divorce

Once the dust clears after a divorce, you’ll need to take stock of what you owe, balance-wise, and what monthly payments you are responsible for. You may discover that payments are higher than what you can comfortably afford each month, now that you’re only relying upon just one income.

In that case, are there any loans that you can pay off and still have enough of a savings cushion in the bank? You might, for example, have a loan with a relatively high monthly payment but, if you only have a few payments left, paying off the loan may help.

If not, consider consolidating your high-interest credit cards and loans into one payment through a lower-interest personal loan. That way, you can focus on paying down just one loan, one that can come with more favorable repayment terms. Consolidating debt with a personal loan could significantly free up cash flow, right when you need it after a divorce.

If you are currently paying off student loans, you may consider refinancing your student loans as a way to free up cash flow post-divorce. At SoFi, you can refinance student loans in a different name; important if, as one example, you take back your maiden name after your divorce.

This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
PL18217

You’ve survived four years, met the requirements, lost countless nights of sleep, and finally, you get to find out where you’ll start your career as a full-fledged doctor. You rank your top choices for a residency program, go on interviews, and cross your fingers. And then finally, you learn where you matched.

Once the excitement of the initial match wears off, however, reality starts to set in. Because residencies are spread throughout the country, there’s a high likelihood that not only will you be starting a stressful new job; you will also be moving and starting over in a new city.

Moving is stressful enough on its own, but moving at the very end of medical school can feel impossible. After all, new doctors have an average of $183,000 in debt from medical school, and may not have an income until their residency begins. Fortunately, there are solutions to help you move, get settled, and start your residency off strong—without worrying about money.

Residency Relocation Costs

There’s no way around it: Moving is expensive and stressful residency relocation costs can add up. Even if you’re moving to a new house in the same city to be closer to your work, you may need to hire movers or rent a truck, buy boxes, and replace little things like shower curtains and cleaning products that seem to always get lost in the move.

The average move to a new house in the same state costs about costs about $2,300 , and that is not even including the takeout you’ll have to buy your friends as a bribe to help you pack.

If you’re moving out of state, the costs can get even higher, and the logistics more complicated. You may want to hire a moving company to move you to your new state, or rent your own truck and make the long trip yourself. If you’re driving, you’ll need to pay for gas, hotel stays, and meals on the road.

Overall, the average cost of moving out of state is a whopping $4,300 .

But those costs only account for the move itself. The expense of settling into a new city can be even higher. You might need to update your furniture so it fits your new apartment, and you may have to replace all the little things that you need in your first few days in a new place like trash cans, towels, and cooking supplies.

Not to mention the costs of exploring a new city and eating out while you set up your kitchen. And don’t forget any costs you may have to incur for your new job, like clothes, or potentially even transportation costs. Those little expenses can add up to a major headache if you’re not prepared.

If you’re feeling the pinch, there are a few loans specially designed for medical residents that may be worth considering. They could help make your transition a lot smoother.

Home Loans for Medical Residents

As a medical resident, you might qualify for a home loan designed specifically for doctors. These loans can have some big benefits, like low down payments, no requirement for private mortgage insurance, and no rate increases on “jumbo loans.” It’s important to do some research to see how you can qualify for these loans.

Of course, there are things to consider before buying a home during your residency. Even if you qualify for a home loan for medical residents, you might not be ready to buy a home just yet. This is especially true if you’re moving to a new city or state and you want to settle in, find your favorite neighborhood, and make sure you really like the city before deciding to buy a home.

If you do decide to start the home buying process, it’s probably a good idea to check out both traditional mortgages and loans designed specifically for doctors. You won’t know which one is right for you until you compare the benefits of each.

Medical Residency Relocation Loans

One loan new doctors may choose to take out is a medical residency relocation loan. You can take out a residency loan from a private lender—for example, Sallie Mae offers medical residency loans .

Or it could be as simple as taking out a personal loan. Some private lenders may offer student loan-type benefits for their medical residency relocation loans—such as forbearance or a longer loan payoff term. On the other hand, a personal loan may allow you to borrow money, and the application process could be expedited if you’re using a reputable online lender.

Residency loans are specifically geared toward new doctors who are beginning their residencies and need to pay for essentials while settling into a new job and a new city. These loans can allow medical residents to fill the financial gap between graduation and your first residency paycheck.

They can help new residents cover the cost of moving and getting settled in a new city, including providing for your family while you adjust to a new job. Overall, medical residency relocation loans can be a lifesaver for doctors who are stressed about the financial realities of transitioning out of school and into residency.

The loans can be especially beneficial for residents who are married or have a family. If you’re making a move for residency and bringing your family along, it is likely that your spouse will also need to look for a job in your new city—which means that they may be giving up a paycheck temporarily as well.

When both partners transition to new jobs at the same time, there can be a significant gap in income. A medical residency relocation loan can help you maintain your lifestyle while you and your spouse acclimate to new jobs.

Residents notoriously operate on little sleep and a lot of stress. A medical residency relocation loan can help make sure that you’re not stressing about money when you should be focusing on patients and procedures.

If you’re interested, you may want to do some financial housekeeping, including things like checking your credit score, and determining exactly how much money you may need to borrow. Like all loans, consider only borrowing the amount you actually need to tide you over until your residency starts paying.

You can get a good idea of how much you may need to borrow by taking a look at your monthly expenses and then adding any additional cost-of-living increases based on your new city and the cost of moving. Don’t forget to list one-time expenses like a security deposit for a new apartment.

When you’ve figured out how much you want to borrow, take some time to shop around for a loan whose terms work for you. Each lender has different terms and benefits, so make sure to understand them fully before making a decision on if a personal loan is right for you.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Mortgages are not available in all states. Products and terms may vary from those advertised on this site. See SoFi.com/eligibility-criteria#eligibility-mortgage for details.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.

PL18206

Interviews are nerve-wracking as is it; you want to say the right things to convey you’re the best fit for the job. But if you’re interviewing with a company after being terminated from your last role, there’s a whole different level of anxiety. Beyond preparing for the standard “tell me about yourself,” you now have to figure out how to answer questions about being fired.

Determining how to explain being fired in a job interview can be tough. How honest do you need to be? Should you bring it up proactively? Will your interviewers ask a string of probing questions? Will the termination affect your chances of getting an offer?

According to Alexandra Dickinson, a career coach and Member Strategy Lead at SoFi, it’s not an uncommon situation to be in—and easily navigable with these tips.

Anticipate the Question

While your interviewer may not directly ask about your termination, there is a good chance he or she will pose a related question, like “Why did you leave your last job?” or “Why are you looking for a new role?”

So, just like you would prepare a response for any other common interview question, you should anticipate a question about your departure from your last company. The worst thing you can do is be caught off guard.

Choose the Right Way to Phrase It

As you’re thinking about how to explain why you were fired, Dickinson recommends that you choose your phrasing carefully.

“‘I was let go’ has a different meaning than ‘I was fired,’” she explains, “and I wouldn’t conflate the two.” The former, she says, gives the impression that the situation wasn’t your fault—perhaps that your position was redundant and therefore eliminated. It doesn’t convey that you were fired for cause—so if that’s the case, and it comes out later in the process, it likely won’t bode well for your candidacy.

Instead, she suggests using a phrase like, “It didn’t work out,” “I didn’t leave on my own terms,” or even “I’m not there anymore.”

“It’s kind of vague,” she admits, “But there’s really only one reason why you would be that vague—so it answers the question without really answering the question, which could make you feel more comfortable.”

Practice Your Delivery

Whatever phrase you select, practice saying it out loud a few times so your delivery feels natural.

“For some people, being fired can be a really emotional thing to go through,” says Dickinson. “And then to have to talk about it in a situation that’s already stressful? That can be really difficult.”

So, grab a friend or a family member—or even just a mirror—and practice delivering your explanation. Get to the point where the answer feels natural and unrehearsed, so you can go into the conversation with confidence.

Be Honest, but Don’t Share More Detail than Necessary

When you’re considering how to explain being fired, you’ll probably wonder how much detail you have to share about the situation. Unfortunately, says Dickinson, there’s no standard requirement.

“It depends on the nature of what happened,” she explains. She suggests thinking about what might come up in a background check or employment verification. That can guide how much you need to disclose about your situation. After all, she says, “you don’t want them to uncover some giant surprise.”

But in many cases, you won’t need to go into a lot of detail, and ideally, they won’t question you further. “If they do press you in a way that makes you feel uncomfortable, is that a place you’re going to feel great about joining?” Dickinson asks.

Don’t Show Any Ill Will

Going through a termination can leave you feeling raw and defensive—but don’t let those feelings infiltrate your interview.

“You don’t want to sound bitter,” says Dickinson. “You may be bitter or defensive, and it’s fine to have those feelings and work through them. But you don’t want that to come across in an interview, because it’s not relevant. The point of an interview is for you to determine if you’re interested in working at this place and for them to determine if they’re interested in hiring you.”

Focus on that, rather than on your feelings toward your past employer, and you’ll be much more likely to impress your interviewers.

Pivot the Conversation

Most importantly, says Dickinson, don’t dwell on the subject. Yes, figuring out how to explain being fired is important, but once you’ve provided a sufficient answer, pivot the conversation to what you can bring to this company.

“Even if you have to be kind of forthright about it, it’s okay to change the subject,” she says. “You can say something like, ‘I’m not there anymore, and I am really excited to talk about this job; this is one particular aspect of job description I’m interested in, can we dive into this more?’”

That can help you get back to the real purpose of the interview: allowing both parties to determine if the role will be a good fit.

Don’t Let It Impact Your Confidence

After getting fired, you may feel like you’ll never bounce back—but according to Dickinson, that isn’t the case.

“Many of us have been let go from a job,” she says. “If that was such a black mark that you could never get a job again, a lot of us would be out of work forever.”

If you’re feeling low, especially before heading into an interview, seek someone out to provide a pep talk. “Talk to some people who love you. Remind yourself that you are loved, even if not by that particular boss. Do what you need to do to feel good about yourself.”

Then, go into that interview with your head held high.

Nailing an interview can be tough, especially if you didn’t leave your last job on your own terms.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
CG18142