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Divorce and DebtYou get divorced. As part of the settlement, your (now) ex-spouse was ordered to pay the debts (car or mortgage note, credit cards, medical bills, etc.). Some divorce lawyers may tell you that your creditors will honor the divorce decree and relieve you of the obligations. I am sorry. They are wrong. Some creditors may. Most often, they will pursue you as well if the debt remains unpaid. Further, they will report the negatives on your credit report. This will hurt your FICO score and future ability to obtain credit for years to come. In addition, you could still be sued by your creditor(s) forthat debt. In general, a Court cannot overturn contracts between individuals unless they are fraudulent or not lawful. A divorce does not apply. So, the contract remains in effect until the debts are paid. When two people (married or not, related or not) apply for credit, they sign a legal agreement with the creditor to pay back that debt. Two applicants are better than one in the creditors’ eyes. The reason is that if the loan goes into default (if he/she, you, it or the other, stops making payments on the credit cards, the mortgage or the car loan), the creditor can go after both parties. This increases their odds of collecting on the debt. No matter what your divorce papers say, the only way to get out of the joint obligation is to have all of the original parties to the contract amend it. Releasing you from the obligation. This includes the creditor. Good luck. Now you could drag your “ex” back into divorce Court to seek some type of relief, but it won’t stop the credit card companies from calling or pursuing you to get their money. Worst yet. If your “ex” stops making payments on the car or house note, the car can get repossessed and the lender may choose to foreclose on the house. If the lender does repossess the car and sell it at auction, you may still have a deficiency balance owed (the amount you originally owed the creditor, less what they got for selling the car at auction). The same can apply with your mortgage. WE all understand that no one goes into a marriage, expecting to get divorced. It’s a grueling and emotional experience. You must look at the settlement of your financial obligations as a vital part of your clean up efforts as you move on with your new life. If not, you’ll be guaranteed to be reminded of each other for years to come….and not in the fondest of ways. This is Just the Article's Beginning... To Read On... Click Here!
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