How does debt play a role in divorce?
Financial topics are inherent to the divorce process. When two spouses decide that their relationship is untenable, their is an unwinding of finances that must happen. Some assets were acquired prior to the marriage, some after. And many spouses will make claims that are in their interests, meaning that they aren’t always right.
We bring this up because there is one topic that often lurks under the radar when you hear the topic of “finances and divorce” being discusses, and that is debt. When a married couple files for divorce, they will have to address their debt. One of the ways to do this is to outline who is responsible for what in a prenuptial agreement.
However, not every couple has a prenup to lean back on. So when a couple files for divorce without a prenup, dealing with debt is an important part of the split. The ultimate divorce decree that the splitting spouses agree to will outline which spouse will take care of each piece of debt. But that doesn’t necessarily mean that it will, indeed, be taken care of.
Sometimes the debt lingers, and in those cases, the creditors can go after the spouse who wasn’t responsible for the debt. This is the drawback of joint accounts. Both parties in a joint account are responsible for the status of that account — even if a divorce decree says otherwise.
It is so important to close your joint accounts as soon as possible and clear out your debt as quickly as you can when a divorce beckons.
Source: FindLaw, “Credit and Divorce,” Accessed Sept. 22, 2016