For many people, one of the classic scenarios they dread when they consider getting a divorce is having to split up their joint assets with their spouse. This is understandable as the process of doing this inherently results in some losses on top of the emotional losses already associated with the end of a marriage. However, it is equally important for people to remember that they should properly tend to their joint debts as well as their assets in a property division settlement.
U.S. News and World Report indicates that creditors will always consider any person named on an account to be eligible to pursue for repayment. This means even if a couple’s divorce decree stipulates that one spouse should repay a particular credit card debt, the bank could try to collect from the other spouse should the other person fail to pay.
This reality makes it wise for divorcing spouses to pay off all debt prior to completing their divorce if at all possible. If this is not possible, the person who assumes liability for a previously held joint debt should be required to transfer that debt into an account in their name only.
Bankrate adds that mortgage lenders will adopt the same approach as credit card banks. For this reason, if one person wants to keep the family home, they should get a new mortgage in their name alone so that the original joint mortgage can be paid off. A quit claim deed may also be signed, transferring full ownership of the property to the person who will stay in the home.
