When it comes to divorce, one of the most common questions is what happens to the debt you and your ex-spouse have accumulated over the years. Here’s a breakdown of how debt is typically handled in a divorce:
1. Shared Debts Are Split: Debt that was incurred during the marriage, such as credit cards, mortgages, or personal loans, is usually divided between both spouses. This is especially common in states that follow equitable distribution laws, where assets and debts are divided based on fairness, not necessarily an even 50/50 split.
2. Separate Debts Stay Separate: If a debt was incurred by one spouse before the marriage or in their name only (such as student loans or credit cards), that debt typically remains their responsibility after the divorce, as long as there’s no law requiring joint responsibility.
3. Protect Your Credit: After a divorce, it’s essential to separate your finances to protect your credit. This might mean closing joint accounts, refinancing loans, or making sure both spouses are removed from joint credit cards. Failure to do so could result in one spouse’s credit being negatively impacted by the other’s late payments.
Understanding the financial implications of divorce can help prevent unwanted surprises down the road. Be sure to address your debts as part of your divorce settlement to ensure a clean financial break and a smoother transition to life after divorce.
