If you and your current spouse accumulated even a small amount of debt during your marriage, you may wonder how to handle it during your divorce. What becomes your responsibility, and what does your soon-to-be former spouse become liable for?
Bankrate describes how courts divide debt when a couple dissolves a marriage. Get clear on how to plan your post-divorce financial life.
While sorting out debts and other financial matters for your legal case, note which loans you co-signed for your spouse and which debts list you as the borrower. You bear financial liability for those debts after your divorce.
It makes sense to work with your spouse on creating a plan to repay debts you become responsible for. If she or he intends to repay the debt alone but fails to do so, you also bear responsibility for late fees and penalties.
To protect your future financial health while completing your divorce, stop using credit cards you and your current partner share. That way, the judge has a better idea of what debt belongs to you and what belongs to your spouse. Talk to your soon-to-be-ex-spouse about closing your joint credit card and bank accounts. You must untangle your finances eventually for your divorce, so you may as well start now.
If your spouse does not agree to close joint credit card accounts, contact the credit card company and see if you may remove yourself from the account. If it cannot, monitor credit card activity closely to track your spouse’s continuing spending.
By educating yourself on the financial aspects of divorce, you know what money moves to make going forward.