divorce and debtsDivorce, under any circumstance, is a punishing process.

We meet people routinely where, in divorce court, a former spouse was assigned a specific debt, but has not paid the debt.  We are called on to collect from the spouse, the one who thought they were absolved from paying by the divorce order.  This is generally never a good call.   The reality is though, that the divorce court does not have the authority to vacate your responsibility in joint debts.  If the other spouse defaults, odds are, you are still responsible.

Generally speaking, if the debt was joint debt, your divorce agreement does not change the fact that you are still liable for that debt – as unfair as that may sound.

If your former spouse declares bankruptcy, and there was old debt that was jointly held, your former spouse is absolved from responsibility through the bankruptcy, and you, are likely still liable on the debt.

As a broad overview, the debts that you brought to the marriage, or your spouse brought to the marriage, will continue to be your (or their) debts legally, regardless of the divorce agreement.

Again, generally speaking, a debt that occurs after separation, but before divorce, belongs to the person that created the debt.  This, however, gets very difficult if the debt was generated on a credit card that is in both spouse’s name.  In divorce, it makes a lot of sense to cancel joint credit cards as quickly as possible, as this can be a gray area that can cost you a significant amount of money.

Often, when we attempt to collect a debt from a former spouse, when the debt was not assigned to them in the divorce, they are unaware that they still have the legal liability.  By the time we are called in, usually the damage is already done to their credit, by their former spouse not paying.  Usually, there are also a huge amount of penalties, fees, and interest that has accumulated by the time these debts end up with us to collect.

We strongly suggest that debts not be assigned to spouses in divorce, but paid off, vacated.  Sell the property to pay the debt, do whatever is necessary to not carry the debt forward.  Regardless of the divorce court’s decisions, you are generally not relieved of debt that is created jointly.

There is an excellent article about making a clean break financially in divorce.   https://getoutofdebt.org/19389/making-a-clean-financial-break-at-divorce.   Articles on the internet, including this one, are no  substitute for legal advice.  We highly recommend that when going through the divorce process, you address these issues of joint debt go forward with your divorce attorney, and if needed with advice from an attorney that specializes in

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