One of the most contentious issues in dividing property in divorce is ensuring that each party adheres to their financial obligations after the divorce decree is signed by the court. Of course, during the process, grand promises may be made to pay off jointly held debt, including mortgages, credit card debt and even medical expenses. However, a person’s financial circumstances can change or an ex-spouse can become obstinate and simply refuse to pay the debt.
Because of these possibilities, it is prudent for prospective divorcees to prepare for the worst. This post will provide some helpful tips.
Do your homework – It is essential that you find out about all debt you may be connected to; meaning that every financial obligation that you are named on, you should know about. It is not unheard of for spouses to learn that they co-signed credit card applications without their knowledge.
Make sure mortgages are refinanced – It is common for divorcees who are moving out of a home to want to have their names taken off the home’s title. While this can easily be completed through a quit claim deed, it is also important to have the mortgage refinanced so that they can be freed from the financial obligation.
Insist on an indemnity clause – If you’re ex promises to pay on a jointly held debt and then defaults, the creditor is allowed to seek payment from you as a matter of law. Because of this, it is helpful to have an indemnity clause to protect against an ex’s default.
Source: HuffingtonPost.com “What your divorce attorney won’t tell you about marital debt,” Cathy Meyer