When couples divorce, their debt will be divided either by mutual agreement or a judge's decree. Regardless of how the finances are settled in a divorce, creditors may still pursue both spouses for jointly held or community property debt.
Joint Debt
If a spouse holds a credit card in her name only, she will generally be held responsible for paying off the card by her creditors. However, in community property states, all debts acquired during a marriage by either party becomes the responsibility of both parties. Both parties can be pursued for this debt, and the credit reports of both parties can likewise be affected.
Divorce Decree
The lawyers of divorcing couples will usually request the couple's financial records to determine a fair financial settlement. The divorce settlement will state which partner is responsible for paying off any credit card debt accumulated during the marriage.
Creditors
Although a divorce settlement may make one spouse responsible for paying off credit card debt, creditors do not have to abide by this agreement between spouses. If a spouse fails to make payments on debt that is jointly owed, the creditors can go after both spouses. The only recourse that a spouse has in this situation is to go back to court to ask the judge to force the other spouse to meet her responsibilities.
0 comments:
Post a Comment