Debt responsibiilty in your divorce
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Debt responsibiilty in your divorce

On Behalf of | May 4, 2020 | Firm News |

It may feel that as soon as a married couple makes the decision to end their relationship, the concerns and interests of each person make a notable shift. Each spouse may start to feel concerned about what assets they may lose as part of their divorce, and what items matter the most to them to try and keep. In addition to focusing on how they will have to split up their shared assets, spouses will also need to figure out how to share their debts.

During the discussions leading to a completed property settlement agreement, shared debts will be evaluated along with the couple’s marital asset pool. One spouse may end up being responsible to repay a debt and this may be documented in the couple’s divorce decree that would be signed by a judge. However, the inclusion of this stipulation in the divorce decree may not prevent future collection efforts against the other party.

Bankrate explains that lenders will consider any named person on an account potentially liable for that debt. This is why many couples attempt to pay down their debt as part of their divorce. Another tactic often employed is the transfer of debt to an account in one person’s name only.

It is also important to understand that even debts in one spouse’s name may be deemed joint debt in a divorce. According to SoFi, student loans in one spouse’s name may be shared debt if the money received from those loans was used to provide housing, food or other items essential to the everyday life of both parties.