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Divorce

Shared Debt in Divorce

Posted by on Feb 15, 2020 in Divorce | 0 comments

I recently came across a US News and World Report article about how divorcing couples handle their shared credit card debt. Most states in the US are “common law” states, meaning that people are responsible for credit card debt acquired under their name and also in joint accounts that they’re a part of. It only makes sense that you’d be responsible for your own debt, but other states do things a little differently. People in “community property states” are responsible for both their debt and their spouse’s debt, as long as that debt was acquired during the marriage. Community property states are: Arizona, Nevada, Idaho, Louisiana, New Mexico, Texas, Washington, California, and Wisconsin.

Still, the court may require someone to pay part of their spouse’s credit card debt if it was to pay for household items or other joint expenses. Essentially, all divorces are different, and the division of assets and debts can quickly become complicated. 

Debts from a creditor and debts assigned to you because of a court ruling are not under the same parameters. A credit card company doesn’t care who is paying off the debts, as long as the debts are getting paid. So, in a joint credit card account, the creditors are not going to oversee how a divorce would affect a couple’s debt payment; they’re just going to expect the money to be paid.

Getting Help

A lot of people, especially people with a lot of assets (or a lot of debts), want to make sure they’re not being ripped off during the divorce process. I think it’s safe to say that most people would rather not relinquish more money to their ex-spouse than they have to. In the same vein, most people would also rather not be in charge of more debt than they need to be. That’s why so many people hire a divorce lawyer to make sure their interests are being protected.

Because everyone goes into a divorce with different circumstances, some people may even be bankrupt at the time of the divorce. A lawyer can help with that, too. According to Manhattan Beach-area family law firm Baden v. Mansfield, bankruptcy courts may release someone from making bankruptcy payments belonging to them or their spouse. This is good news to people who could be stuck paying the price for their ex-spouse’s bad money sense. However, getting out of paying for your ex’s debts is not a guarantee, and getting an experienced divorce lawyer to help out is a necessity for some people. 

Even though a divorce lawyer is an extra expense, it’s often cheaper than losing money in a bad settlement. That said, you should always hire a lawyer that has experience and success representing people in situations similar to yours.

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