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What happens to debt after the divorce?

On Behalf of | Dec 8, 2023 | Divorce |

Divorce can be straightforward, but some cases are complex, especially if they involve diverse properties that are challenging to divide. The same goes for debt gained during the marriage. They can be marital property, so courts can include them in the order and indicate who will be responsible.

However, it can be a different story when considering the specifics of the debt agreement. Each state has varying laws regarding debt, but they typically consider both parties liable unless they update the contract. It often applies to debt obtained using the names of both parties, such as the following:

  • Mortgages on properties owned together during the marriage
  • Auto and personal loans
  • Overdue payments on utilities
  • Medical expenses
  • Joint accounts created during the marriage

The divorce only ends the marriage but does not end obligations to creditors. The responsible party could remove the other person from the agreement or refinance the loan for these types of debt. Failing to do so might lead to a debt collector asking you about your former spouse’s debt if they fail to pay on time. You could inform your creditors by sending them a copy of the divorce decree. Still, it could only notify them about the divorce and not remove your name from the contract.

Knowing when to seek help

If you are on good terms, asking your former spouse to sort out missed payments can be easy. If not, it can be challenging to resolve these issues, potentially intensifying any existing conflicts between you. When in doubt, it is best to seek counsel before initiating any legal action. Having guidance could help you determine the most appropriate options, considering your unique circumstances.