When you and your spouse make the decision to end the marriage, one huge issue you will have to resolve is the division of debt. If you have no debt, you would not have to worry about this, but most couples do have debts they must divide. As you prepare for this, here are some important details to understand about the debt agreement you create.
You likely will have to split it equally
In most situations, a couple who divorces will end up having to split the debt they owe in half, which means each spouse will be responsible for 50% of the debts they owe as a married couple. If you have $30,000 in debt, each person would end up with $15,000.
The divorce agreement is just for you and your spouse
When you divide the debts, though, you will have to list them on the divorce decree and state which spouse is responsible for them. The downside to this is that the debts you owe might be in both of your names. While this does not matter, in terms of the divorce decree, it will matter for other reasons. The divorce decree is simply a legal document that is designed for you and your spouse. The agreement states how you divide your debts and who is responsible for them, but this document does not hold up with creditors.
In other words, if your spouse ends up responsible for a credit card bill that is in both of your names, the credit card company can pursue you for the debt owed even though your divorce decree clearly states that you are not responsible for it. Creditors do not care what divorce decrees state, and they have the legal right to pursue collections from anyone listed on the debt.
You should look for ways to get your spouse's responsibility of debt out of your name
If you want to avoid problems in the future over debt issues, you should look for ways to get the debts you are responsible to pay in your name and the debts your spouse is responsible to pay in his or her name. One option is for each spouse to get his or her own personal loan and use it for consolidating the debt, but your lawyer might have other suggestions to consider too.
Creating a debt agreement is vital in a divorce, but it is even more important to find a way to truly divide the debt so each of you will be fully responsible for your own portion. To learn more about this subject, talk to a divorce lawyer in your area.
I am a real estate attorney, and I have been helping clients buy and sell property for many years. Some clients do not realize their legal obligations and options when it comes to purchasing or selling a house or land. I hope that this blog will be a way for people to get information about legal issues in real estate and what they need to know when doing business. Buying and selling property can be complicated, and all parties involved have legal obligations. Know what is expected of you, and you will be able to get the best out of your real estate transactions.