How to Avoid Being Stuck With Your Ex-Spouse's Debts After Divorce

It is quite common for a person to file for bankruptcy after a divorce—often because debts are not divided properly during the divorce. If you are preparing for a divorce or have recently gone through a divorce, you may want to talk to a family lawyer to find out if there is anything you can do to prevent falling into the trap of being responsible for your ex-spouse's debts. There may be certain things you can do to prevent this, and your lawyer will help you understand how this works.

How Are Marital Debts Divided?

When you get divorced, you will have to divide your assets and debts. Dividing assets is usually fairly easy to do, because each of you can physically take possession of the assets you are entitled to. Dividing debts, on the other hand, can be a little more complicated.

Marital debts are often in the names of both spouses, yet they must often be divided equally between the two, and this is where things can become complicated. When debts are in both names, both people can be held responsible for them. Creditors do not look at divorce decrees to see who is really responsible for the debts owed. They will simply look at the agreements to see the names on them, and this is who they will come after if the debts are not paid on time.

How Can This Affect You?

If you have debts in both names that your spouse is responsible for paying, you could get stuck owing the debts if they didn't pay them. In addition, if your spouse files bankruptcy, the creditors will no longer be able to come after him or her for them; however, they will be able to come after you if your name is on them.

This is one of the reasons divorced couples may find the need to file for bankruptcy. Owing money for debts that are not really yours seems very unfair, yet there is very little you can do about this if the debts remained in both names after the divorce.

How Can You Avoid This Problem?

If you want to protect your credit and avoid filing for bankruptcy, you may want to seek help from a family lawyer during or after your divorce. Your lawyer may offer the following suggestions to help you avoid this common problem with marital debts:

  • Require separate debts—The best way to avoid this problem in the future is by requiring each spouse to get the debts in their own names. The problem with this is that it is not always possible. If you have bad credit and cannot get a personal loan to put all debts in your name, you might not be able to use this option. If you can use this option, it would work really well, because each person would then be responsible for his or her own debts.
  • Include indemnity clauses in the divorce decree—If the divorce is not yet finalized, your lawyer will probably suggest including indemnity clauses in the decree for this purpose. An indemnity clause will allow you to take your ex to court if he or she fails to pay the debts the decree orders him or her to pay. This will not protect your credit, but it would offer a way for you to recover money if you were forced to pay the debts your ex was responsible for.

Divorce does not have to force you into bankruptcy, but it may require the help of an experienced lawyer. If you would like to learn more about these topics, contact a family lawyer in your neighborhood today for more information.

About Me

Learning about Legal Contracts

Hello, I am Miranda Parker. Welcome to my website about legal contracts and paperwork. When I was going through my divorce, and subsequent bankruptcy, I was given an incredible number of legal contracts and paperwork to fill out and sign. The documents gave my attorneys that opportunity to represent me in court and fight for the items that were important to me. On this site, I will explore the purpose of each type of legal contract in great detail. I will talk about the best practices you can use when faced with a pile of legal paperwork to handle. Thank you for visiting my website.



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