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Marital Debt Is Also Marital Property

You and your spouse probably accumulated a lot over the course of your marriage. There is the house, the car, children and financial assets. But you also probably accumulated debt, as well.

Distribution of the assets is difficult, but it can be just as hard to figure out who is responsible for bills.

Your Protections, If You Can Prove Them, Include:

  • Get as much information as you can. If your spouse was the person writing the checks, you might be able to prove it is their debt. You will need your credit report, and information on bills, accounts and loans in your name.
  • Remove your name from accounts your former spouse agrees to assume. You cannot remove your name from mortgages, home equity lines of credit and car loans.
  • Indemnity clauses. They allow you to sue your ex if they fail to follow financial agreements the two of you made during the divorce. If they agree to take on a debt, but fail to follow through, the clause holds them accountable.
  • Refinancing. Removing your name from some loan agreements is not always possible. When that is the case, your best option might be to refinance. In a mortgage refinance, you might have the house reappraised. That can increase or decrease its value. You might be able to refinance the mortgage, and how much you owe, based on that new valuation.
  • Do not rush to pay off debts before finalizing the divorce. Talk to an attorney before you do this. They can be your advocate and negotiate how you settle your share of the debt. Maybe they can offset some of the debt against assets or defer them. You also might not have to share payments equally.

Your Debts Before Your Divorce Might Not Have To Be Shared Equally

You are wondering if you have any responsibility if you did not know about the debt or if you were not the person who took out the loan or ran up the credit card. Unfortunately, if you had a joint account and your name is on it, you have some of the responsibility to pay it off.

What if you and your spouse have a verbal agreement? Well, it does not matter. Creditors only care about what you owe them. There are steps you can take before the divorce that could protect you.

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