Most people in Kentucky have heard divorcing spouses bemoan the loss of their home, part of their retirement account or some other asset when they have gotten divorced. Certainly, this is one of the hard parts of ending a marriage in which couples have co-mingled assets. However, it is important for people to remember that they must also figure out how to split up their debts during a divorce.
As explained by Clearpoint Financial, there are several factors that may play into a debt division agreement. One of these factors is the future ownership of any secured asset, like a vehicle or a boat. The spouse who will keep the asset may well be the person who is assigned responsibility for the associated debt. When it comes to a mortgage, if one person wants to keep the house, they should consider refinancing to get a mortgage in their name only. Doing this is the only way to eliminate financial liability for the other party.
Much debt carried by today’s couples is unsecured, like that of credit card debt. When it comes time to divvy up these debts, assigning responsibility may only be one of the important steps to be taken.
CreditCards.com recommends that couples find a way to pay off as much jointly held debt as possible before their divorce is final. From there, any debt that is remaining should be transferred to a new account in the responsible party’s name only. As with a mortgage, this prevents future credit problems for the other person if the responsible spouse fails to make payments.