Debt after divorce: Yours, mine, ours

On Behalf of | Apr 27, 2020 | Family Law

If you are like most married people in Georgia, you and your spouse have some shared debt. This may be in the form of a mortgage that is in both names, joint credit cards and even joint automobile loans or lease agreements. When it comes time to divide your marital assets in a divorce, you will also need to address how to divide your joint debt. 

Agreeing which party will be responsible for a joint debt is only one step in the process of addressing this issue during your divorce. You and your spouse will want to pay close attention to how you document that responsibility. Many people may think that a court-approved divorce decree is the only thing they need. 

As explained by Bankrate, relying on a divorce decree to assign debt responsibility may not protect the spouse who is not responsible for a debt. Joint debt accounts should be cancelled. For any debt unable to be paid off during the divorce process, the spouse who is to pay the debt should obtain a new debt account in their name only. Any joint accounts with balances allow lenders to pursue repayment against both people named on the account and make negative credit reports even if a divorce decree indicates only one person was supposed to make payments. 

If you would like to learn more about how a creditor or lender views debt responsibility after your divorce and how to protect yourself financially, please feel free to visit the asset and debt division page of our Georgia family law and divorce website.