Handling marital debts during a divorce

Handling marital debts during a divorce

When you divide marital property in a divorce, you must consider both the assets that you have as well as the debts. Often, the debts can be used to balance the property division settlement once the assets are divided.

As you split your debts, remember that you and your ex are both probably still going to be held legally liable for them. A property division order is a civil matter that exists only between you and your ex. This means that the creditors don’t have to abide by the terms of the order. Some creditors are willing to work with people in this situation by transferring the account to the party who accepts responsibility for the debt but this is determined on a case-by-case basis. It might be possible for you to have certain debts transferred to accounts in your name if the creditor won’t agree to remove your ex’s name off the ones for which you’re assigned responsibility. Consider this carefully, because you might end up having to pay for fees or higher interest rates.

Some divorcing spouses choose to sell some marital assets to pay off their shared debts. This ensures that the bills do indeed get paid. When your ex is assigned debts, there is a chance they won’t pay them. If you’re still responsible for the accounts that aren’t paid, it can negatively impact your credit report.

Throughout the divorce process, you have to think carefully about how you handle each decision. Many have the possibility of impacting your future, so be strategic when making these decisions. Try to think practically about each matter instead of letting your emotions rule.

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