There are limited options when your ex-spouse fails to pay joint debts.
One very common problem that people encounter in divorce is protecting their credit when an ex-spouse fails to pay marital debts such as credit card bills, car loans, or mortgages. When a married couple takes on debts such as these, they often enter into contracts with creditors that bind both spouses. While a subsequent divorce severs the relationship between the spouses, it does not affect the relationship between the borrowers and their creditors. In fact, the divorce process does not affect the creditor's rights at all. If the mortgage is not paid, the bank has the right to go after BOTH borrowers.
How to Protect Yourself
There are generally three ways that you can protect yourself if your ex-spouse's failure to pay debts is ruining your credit. First, you could pay the debts yourself. This may be the simplest course of action if you want to ensure that your credit will not suffer when your ex-spouse fails to pay on a joint-debt. However, depending on the size of the debt and your financial circumstances, simply paying your ex-spouse's debts might not be a desirable solution. Certainly, you might not want to continue paying a car loan on a vehicle that is used exclusively by your ex-spouse after your divorce. Second, you might be able to refinance your debts. If the bank allows it, the spouse who is in possession of the asset in question can refinance the loan or mortgage exclusively in his or her name. Unfortunately, especially with large loans like mortgages, it may not be possible to refinance when one spouse alone does not have the income to refinance. Finally, a third option is to ask the judge in your divorce case to order your ex-spouse to pay the debt. However, this approach can be expensive, time-consuming, and difficult to enforce.
An Ounce of Prevention
Because the available legal solutions are limited in situations where your ex-spouse's failure to pay debts threatens to ruin your credit, it is in your interest to carefully consider the potential for these problems to arise while you are in the process of dividing marital property and debts. During the divorce process, marital assets and debts are distributed between the spouses. When distributing debt-financed assets such as houses and cars, it makes sense to consider how the spouse who is awarded the asset will pay the debt. During the negotiation process, be sure to consider alternatives such as forcing the sale of a house rather than awarding it to a party who does not have the ability to refinance or make the mortgage payments.
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