When it comes time to split up marital property in a divorce, the reality of the matter is often far more complex than people realize. One of the most common pitfalls for divorcing couples is what to do with debt that they jointly accrued. Many couples forget that liabilities are also a part of marital property and must be divided up just like assets.
If you’re facing a divorce and you have some credit card debt to address, you would be wise to do everything you can to separate yourself financially from your soon-to-be ex-spouse. Imagine, for instance, that you and your spouse both have a number of credit cards with balances totaling about $25,000 total. As a part of your property division agreement, your spouse agrees to pay the balances down on the cards. Here’s where things can get ugly.
At first, maybe things go well, and your ex is paying the balances down consistently. Then, he or she hits a rough patch and cannot — or does not — make the payments. Suddenly, you’re getting phone calls from creditors wanting payment. “But,” you might ask, “isn’t that my ex’s responsibility?” Well, yes and no. While your spouse may have agreed to carry the debt, you’re still on the hook for it if your name is on the credit card or line of credit.
These kinds of arrangements are common, and in some instances they are the least bad option. If you must make such an arrangement in your property division, be sure to remain vigilant about protecting your credit from your ex-spouse’s mistakes. If you need help navigating property division in divorce, be sure to reach out to an experienced lawyer who can help you protect your future and your priorities.
Source: Findlaw, “Credit and Divorce,” accessed Sep. 08, 2017