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Can joint debt be a problem for divorcing couples?

by | May 9, 2019 | Divorce

When it comes to your impending divorce, you will have a lot of questions you will need to ask your Pittsburgh attorney about what is to come. Make sure that your marital debt is one of the items near the top of your list of inquiries. If you are not careful, you might find debts that you currently share with your spouse can cause you major trouble down the road.

As the CESI website explains, it does not matter whether a couple is married or not if they both own debt together. Debt can take many forms, such as a line of credit, a credit card, or a loan, but if the debt is jointly owned, each spouse remains responsible for paying off the outstanding amount, even after the divorce is finalized. Ideally, both parties should work out how to pay off their debts during the divorce.

Trouble may arise because some divorces deplete the assets of one or both of the spouses involved through asset division and court costs. A devastated financial situation makes it more likely that one of the divorced spouses cannot come through on regular debt payments and may have to declare bankruptcy. Going bankrupt can relieve the filer from creditor harassment and give the filer an opportunity to discharge some of the debt.

The problem is that bankruptcy may stop your ex-spouse’s debt obligations for a time, but it does not stop yours. In fact, a creditor or a lender may insist that you are now fully responsible for the debt and could hike your debt payments. However this situation unfolds, you may end up paying more than you had expected before your spouse filed for bankruptcy. If you were not expecting to pay more on your debt and did not prepare for unexpected expenses, your own finances could suffer.

To prevent marital debt from becoming your financial time bomb, consider consulting with an experienced divorce attorney on how you can work out your marital debts and prevent financial ruin. Because divorce issues are different from couple to couple, do not consider this article as legal advice. Read it only for your educational benefit.