Just like assets, debt is also split in the process of a divorce. It is very important during a divorce to have full disclosure with your spouse regarding all assets and debts. This should include the account numbers of all pertinent assets and debts and the responsibilities of each spouse for these debts.
Unless you have a specific indemnity clause, debtors may still contact and reach out to you regarding debts. This is true even if the divorce proceedings state that the debts are to be split evenly and your spouse is not paying off his or her share of the debt. If your spouse is to obtain the title of a house, car or large asset, you should see that any outstanding loans for the property are refinanced solely by your spouse with your name off the title.
There are a few steps you may take to help minimize the potential of financial disaster. As the common cliché goes, "knowing is half the battle." Make certain you are aware of all your assets and debts, your spouse's assets and debts and all assets and debts shared by you and your spouse. For property that is changing hands, make certain that it is refinanced solely under your spouse's name. Make an effort to pay off debts before the divorce filing; the less that there is to address, the less complicated the divorce process will be.
The division of debt can seem like an overwhelming hurdle to address. Add to it the stress of not knowing your financial situation once the divorce is complete, and you may be left uncertain about your future. This may lead you to make hasty decisions, which are not in your best interests. Proper planning and a strong team on your side will only help make certain that the right decisions are made and that you will be on solid ground when you start your life over following the divorce.
Source: Huffington Post, "What Your Divorce Attorney Won't Tell You About Marital Debt," Cathy Meyers, Accessed on Oct. 6, 2016