Divorce and Unsecured Debt Responsibility

Divorce and Unsecured Debt Responsibility

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Understanding the issues of unsecured debt responsibility after divorce is important, because what you don't know can come back to haunt you. When couples have debt of any kind, particularly when the debt is jointly held (in both of your names), it becomes very important you and your soon to be ex-husband have a clear agreement as to who is responsible for paying the debt. A clear agreement is one that is written. If you are using an attorney, he or she will put language in your separation agreement or divorce decree detailing this. This agreement should include account numbers, payment terms as well as instructions as to what will happen if the payments are not made.

If you and your spouse took out loans(s) to pay off high interest credit card debt and the items purchased were for your spouse's personal use or benefit, then they should be responsible to pay their debt. Even though you are divorcing does not relinquish their responsibility from having to pay this, but the fact the loan is also in your name does not relinquish your responsibility either. Generally speaking you cannot remove one party from a debt obligation unless the debt is re-structured in some way, such as with a home equity loan. If your spouse has sub par credit it should be enough reason alone for them to want to begin the slow process of rebuilding and improving their credit. The first way to do this is to make every payment on time. You both have a common interest in making sure your credit is positively maintained and it is in neither of your best interests to do anything to damage it. If either party does not meet your debt obligations, you suffer equally and the effects can last a lifetime.

If you feel your spouse cannot or will not be a responsible adult and pay their debt obligations, you should seek outside help to draft an agreement outlining each others responsibilities. If you are not working with an attorney already, another option is to use mediation. In mediation, both parties meet voluntarily to discuss the issues which brought you there. If you and your spouse reach an agreement, the mediators can help you put that agreement into writing. Any agreement reached carries the same weight as if ordered by the court. One benefit of mediation is any agreement reached is your own and not dictated to you by someone else to you. People tend to honor agreements they make themselves.

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