Property division is usually at the heart of most divorce cases. However, dividing debt is equally important if you are going through a divorce. Debts can impact your financial security and quality of life years, which is why it is necessary to be on top of such aspects of your divorce proceedings.
Division of debt following a divorce depends on individual state laws on dividing marital property. Debts incurred before marriage by either spouse may not be assigned to the other. Instead, joint debt accrued by both spouses will be up for division in the event of a divorce.
Under whose name is the debt?
Credit card debt, car loans and mortgages are a few examples of debts a divorcing couple may owe. Courts may divide these debts based on:
- The nature of the debt and how it was incurred
- The debt, liability and economic circumstances of each spouse
It is worthwhile to note that as long as a debt is under your name, creditors can still come after you even if a court order places the obligation on your ex-spouse, who then defaults on payment. The only way to protect yourself is by getting your name off the debt or arranging a separate refinancing agreement with your lender or creditor.
Safeguard your interests by being more involved in your finances
Proper financial planning may prevent some situations from playing out, like in such instances. As such, it is necessary to be meticulous with your finances, debts included. It may also be helpful to engage in dialogue with your ex-spouse and lay down plans on debt repayment post-divorce.
Finally, while you may seek legal redress against a non-paying partner, it is best to save the time and money involved in the judicial process by having a joint consensus on the way forward.