Dividing debts and assets during divorce

If you and your spouse are separated and have made the choice to get divorced, you may well be highly concerned about how you may need to split your assets. From retirement savings to stocks, bonds and more, a divorce may result in the loss of some very important financial assets for you. While it is important to focus on how to preserve the right assets for your needs, it is equally important for you to manage the division of any debt you share with your spouse in a very careful manner.

As explained by U.S. News and World Report, a creditor need not be bound by the terms of your divorce agreement when it comes to trying to collect on a debt. If your name remains on any joint credit account, a lender or bank may pursue you for repayment even if your divorce settlement assigns responsibility for that debt to your spouse.

If and when possible, you and your spouse may want to find ways to pay off any joint debt as part of your divorce process. This prevents any future scenario where you end up on the hook for their debt. If this is not possible, you might want to require your spouse to transfer any debt they are responsible for paying into a new account in their name only.

If you would like to learn more about how to protect yourself against unnecessary debt problems related to your divorce settlement and your spouse’s actions, please feel free to visit the debt and asset division page of our divorce and family law website.