The majority of Americans are plagued by debt. Whether it’s a mortgage on a home or a string of luxury purchases on a credit card, many American couples are experts at racking up debt. While this debt may seem inconsequential when you are enjoying a blissful marriage, if things do go wrong, someone is going to be left with the bills.
Working with a skilled debt lawyer is the best way to ensure you are financially protected during the divorce process. If you are going through a divorce and are worried about accumulating debt from your marriage, here are the top things you should know about divorce debt.
How the Court Divides Divorce Debt
At the start of a divorce, most couples are most concerned with their assets and how they will be divided. Often, debts are overlooked as a part of the separation process. However, they are equally important to assets in determining a couple’s net worth. When you’re going through a divorce, the best way to understand your economic position is to look through all your financial statements.
During the divorce process, the court will allocate a couple’s debts and assets, indicating which person is responsible for paying certain bills and who will be allocated various properties or other assets. In most cases, the court tries to equally divide assets and debts between parties. However, they can sometimes be used to create balance in a divorce settlement. For example, a spouse that is given more property may also be allocated more of the couple’s debt.
Different states have different laws for divorce proceedings and how debts and assets are divided. While some states account for the assets and debts each person brought to a marriage, other states view everything in marriage as equally owned. Additionally, any prenuptial agreements will affect how things are allocated during a divorce settlement.
What Happens When Your Former Spouse Doesn’t Pay Their Debt?
In some cases, a former spouse doesn’t pay the debts they were assigned in the divorce settlement. When this occurs, a creditor is likely to approach the spouse originally responsible for the debt, even if both parties incurred it.
If this happens to you, you could be subject to legal proceedings on the debt, and may even be held legally responsible to pay the debt, even if the divorce decree placed the responsibility with your ex-spouse. You would have a claim against the ex-spouse to enforce the decree, but you may not have a defense against the creditor in civil court.
Filing for Bankruptcy and Divorce
It’s fairly common for bankruptcy and divorce to go hand in hand. Often, the financial strain and emotional burden of bankruptcy can be the final straw for a spouse. In other scenarios, a divorce settlement may be so expensive that one or both parties cannot afford their allocated debt, requiring them to file for bankruptcy.
Note that bankruptcy does not cease child or spousal support payments. While bankruptcy court will keep other creditors from contacting you, any court-ordered support will be upheld.
It’s Best to Sort Out Your Debt Before a Divorce
In a divorce, debt creates added stress to an already stressful situation. Going into a divorce with a sizable amount of debt also keeps ex-spouses connected in a time when they are trying to separate and create space. Therefore, if your situation allows, it’s best to handle your debt before getting a divorce.
Consult with a Debt Settlement Lawyer
If you are going through a divorce and are concerned about how you and your partner’s debts will be handled, you should consider consulting a debt settlement lawyer. At McCarthy Law, we are dedicated to resolving our clients’ debt problems, including when those problems arise from divorce. Debt issues are a national problem, and we work across the country to ensure people receive the debt services they deserve.
To schedule a free consultation with a knowledgeable and experienced debt settlement professional, call our office at (855) 976-5777 or fill out our contact form today.
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