One of the most important aspects of divorce is dividing the parties’ debts. While couples may bicker over who is obligated to pay for what, or a divorce decree orders a party to continue to make payments on property, it is important for divorcees to create a plan and protect themselves against things that can happen after divorce.
In this post, we will offer some helpful tips about dividing debt so that you can protect your interests in the future.
Get your credit report – Knowing what is on your report is important because you don’t want any surprises when it comes to money owed after a divorce. You never know when your ex could have completed a credit application with you as a co-signer without your knowledge.
Get indemnified from creditors – In a number of instances, a spouse will promise to pay off jointly held debts. However, if that spouse fails to make such payments, a creditor still has the legal right to pursue the other spouse for payment, even though the couple is no longer married. An indemnification clause within a divorce decree can provide some much needed protection against an ex-spouse’s default.
Make sure property is refinanced – If you are moving out of a home and your ex is keeping the property, it is essential that it be refinanced in his or her name only. It is one thing to be taken off the title to property, but to be relinquished from your obligations under the mortgage, it must be paid off and essentially replaced by another mortgage.
Source: HuffingtonPost.com “What your divorce attorney won’t tell you about marital debt,” Cathy Meyer, Mar. 2, 2014