A fundamental part of almost every divorce is dividing up assets and liabilities in a fair way that a court will approve. As part of your property division negotiations, it is common for one spouse to assume the consumer credit debts of another to even out property division terms. However, if these issues are not carefully examined and resolved as part of the divorce negotiation, creditors may continue to pursue both parties for payment if one party does not uphold his or her end of the agreement to repay the debt.
This is particularly common when it comes to credit accounts held jointly by both spouses. It is a relatively simple matter to agree that one spouse or the other takes over the responsibility to repay a jointly held credit account. It is a different matter entirely to remove one spouse’s name from the debt so that creditors will no longer pursue that spouse for payment if the assuming spouse falls behind.
The reality of the situation is that a poorly executed divorce that does not fully address credit account issues may leave both sides vulnerable to damage to their credit scores. It goes without saying that damage to a credit score is never desirable, but it is particularly undesirable after a divorce as you attempt to rebuild your life as a single person. Furthermore, there is no need to make your divorce extra painful and protracted by creating a constant reminder of this costly error.
If you face divorce and carry debt joint debt, be sure that you fully address this issue with an experienced legal professional. Proper legal counsel from an experienced divorce attorney can help you ensure that your divorce truly separates your life and your credit score from your spouse and any financial choices he or she may make in the future.
Source: FindLaw, “Credit and Divorce,” accessed Jan. 12, 2018