Most married couples share everything when it comes to expenses and assets. So when it comes to getting a divorce, not only do finances, property, possessions, and even business ventures have to be divided, but debts must be discharged (or split) as well. In truth, one party could be held entirely liable for debts incurred during marriage if the other party refuses to pay (although this can be settled by a court if a company decides to come after one party for the full amount). The point is, you must be fully aware of all assets and debts at the time of the divorce so that you can protect yourself and your credit from ruin. Here are just a few things you’ll want to be aware of.
The first and most important debt to consider is a home loan, and it’s all too easy to get into hot water with your credit when it comes to property. Your best bet is to sell your home and split any proceeds, but considering the state of the housing market at the moment this simply may not be in anyone’s best interest. Plus, most couples with kids don’t want to upset the harmony of the household any more than they have to, so hanging onto a family home could be an emotional decision. In this case, the party retaining the property should attempt to refinance in his/her own name in order to remove the ex-spouse’s name from the title and relieve that person of the burden of liability for payment (should the now singular owner default).
You may opt for a quit claim deed in order to remove your name from a home title, but unfortunately this does not simultaneously remove your name from the loan, which means that any entity holding it may come after you for repayment, even years after the fact. In the case that you decide to sell, make sure that a date is agreed upon for vacating the home and then submit a change of address to your mortgage company so that you can receive relevant notifications at the very least.
But what about other debts (medical, credit card, other loans, etc.)? Any and all loans for physical assets should be dealt with in the same manner as your home loan. In other words, it’s in your best interest to discharge them expediently. Suppose your spouse retains a car that is in both your names and totals it. You’re still on the hook to pay for your portion (or perhaps all of it if your ex defaults on loan payments). And any medical bills that are claimed as community property (even if they didn’t benefit you directly) could also fall under your responsibility to pay.
As for credit card debt, obtaining a divorce in Austin, Albany, or Absarokee will not reduce the complications involved in payment. The only real option here is to pay off the account and close it, and even then one party might successfully reopen the account and rack up more debt. But you can always call creditors and deny charges made after the divorce is final and even sue to have subsequent debt placed solely in the offending party’s name. And if you can’t afford to pay off accounts and close them promptly, make arrangements during divorce proceedings for all joint credit card debt to be split up amongst new credit accounts under your separate names. Dividing debt during a divorce can be far more difficult that splitting up assets, but if you don’t take every precaution to tie up loose ends it could end up ruining your credit down the line.