Things to Remember About Accepting Debt in a Divorce
In a divorce, many couples give a lot of thought about who gets what property. Couples may spend a lot of time fighting over the value of property that will be divided. However, rarely do couples give any thought about who will get what debt, and even when they do, they often do not properly take into account whether what they agree to will even be effective.
Dividing Marital Debt
Just because you and your ex decide who will be responsible for a debt in your divorce, does not mean that the creditor has to listen to you. The creditor has a legal right to go after whoever is legally responsible for the debt.
For example, if you alone took out a credit card and incurred debt, the credit card company will go after you—they do not have to go after your ex just because he or she agreed to be responsible for your debt (although you may be able to go after your ex in family court if he or she doesn’t pay the creditor).
It is not a defense to a collection action that your ex agreed to pay the debt in a divorce and did not pay it. This is true even if both of you took out the debt, jointly. This is why in a divorce, if you can, it may be easier for couples to try to accept debts they are legally responsible for anyway.
Mortgage Loan Problems
Often, divorcing spouses try to divide debt that cannot even be divided. For example, a couple may say in a divorce agreement that a husband will be responsible for paying the mortgage loan. However, the wife may be the only name on the loan, and thus, the only person legally liable for the debt. The mortgage company is not going to change the name on the loan just to comply with your divorce agreement.
In fact, if the Husband has questions and wants to contact the lender, he may have problems getting information—the lender’s paperwork says the wife is the borrower, and thus the only person who can receive information about the loan.
If the husband does not pay, the bank will foreclose on the property—it is not a defense that the husband agreed to pay and is violating the divorce agreement. The property could not only be lost, but the wife may end up owing money to the bank.
Remember that in any situation when one spouse accepts debt which the other spouse is legally obligated to pay, there are credit issues as well.
In our mortgage example, if the husband pays, but routinely pays late, the wife will have her credit affected negatively by the repeated late payments. The same goes with agreements to pay car loans, credit cards, rents, or any other types of financial obligations. Spouses who are legally obligated to pay debts but rely on ex-spouses to pay them, always take a risk of their credit being damaged by late or non-payments by the ex-spouse.
Questions about debt, foreclosure, or consumer credit problems? Contact the Miami consumer rights attorneys at Jacobs Legal today.