Protect your credit during property division in a divorce
People who are going through a divorce have a lot to think about. While you might be focused on making sure the assets are divided properly, there’s one more thing to consider: Your marital debts.
Marital debts are often a challenge to deal with because property division is a civil matter. This means that creditors don’t have to abide by the terms set in a divorce agreement. Even though divorcing spouses may have divided the debts, creditors can still hold both parties accountable. If your ex fails to pay debts that have your name on them, that can negatively affect your credit.
What can you do to protect your credit?
For most people who are going through a divorce, the best way to handle debts is to sell off assets to pay for the debts. This can give both parties a clean slate since they won’t have to worry about whether their ex pays for their share or not.
If there’s no way to pay the joint debts off, both adults may need to try to open new lines of credit so that they can transfer their share of the debts into their own names. This makes each person solely responsible for their own share of the martial debts.
There are some instances in which neither of the previous options will work. This means that you’ll need to monitor the accounts to see if they’re being paid. While it’s not ideal, you should be prepared to pay for accounts that are late (even if they’re your ex’s responsibility), so they don’t affect your credit. You may be able to turn to the court to recover the money if you have to pay.
Make sure the division of debts is clearly stated in the property division document. This ensures you and your ex both understand what responsibilities you have after the divorce.