Credit Federal - divorce decrees, joint debts and assets. Who pays?

Joint debts remain joint debts. Both spouses signed a legally binding contract with the creditor, and a divorce decree neither amends this contract nor relieves the creditor's investment in you. Amendment of any contract requires agreement by all parties, including the creditor, and proof of the amendment requires the signature of all parties. During a divorce, the creditors are not part of the divorce courts, and therefore the original agreements/contracts stand.

If you have a joint financial obligation with your ex-spouse, and your divorce decree states that your ex-spouse is responsible, and your ex-spouse is delinquent on paying, your credit as well as his/hers is affected. As is stated above, your legal responsibility for a debt does not go away because a divorce decree assigns responsibility for a debt to your ex-spouse. Along with a legal responsibility to pay comes the right of the creditor to report a debt delinquent on your credit report if it's not paid as agreed in the original contract.

Especially tragic are situations where one ex-spouse files bankruptcy and includes many joint debts in the bankruptcy. The spouse not filing bankruptcy is left holding the bag for these joint debts, and many times they're not notified of the ex-spouse's filing until months or years down the road when it's too late to correct the situation. So not only is the spouse who didn't file responsible for the unpaid debts and can be legally sued for them, but the non-filing bankruptcy spouse's credit is also ruined, something that cannot be corrected, as the credit bureaus have the right to report them delinquent.

The purpose of divorce is to split off emotionally and financially from your ex-spouse. If you aren't careful, your spouse's handling of your once-joint accounts can haunt for years. If you had joint debts which existed before your divorce, and these accounts are not both paid off and closed, you're just asking for trouble. Also, although some divorcing couples are definitely out to get each other, most problems with joint accounts prior to divorce are caused by ignorance, not malicious intent. Don't think that just because your split is amicable that problems can't occur. Taking precautions can protect BOTH of you. Order a credit report and review all outstanding debts.

More credit articles related to divorce:
joint mortgage loan  joint auto loan    joint credit cards

Need more information? Read our financial and credit articles related to joint credit, and join our online financial newsletter.

Credit Freeze	Using a credit freeze to lock access to Transunion, Experian and Equifax credit report bureau information as security to protect against identity theft fraud, as well as divorce and spouse actions.
Divorce and Debts	Facts about Divorce and Paying Debts on an Individual or a Joint Spouse Account.
Marriage and Divorce	Getting married or divorced? Changing your name? How these situations and a spouse may affect you financially.
Divorce Credit Bills	Article about divorce and credit. If joint credit is primarily in your spouse's name, you may find it difficult to get credit approved in your name.
Joint credit report debt - loan and credit card bills	Joint credit report debt, loan and credit card bills. Marriage and even a divorce decree can cause bad credit due to a spouse's action.

Joint Credit Score	Marriage and Divorce: Should you do a credit check on your fiance? Free tips about a joint credit score, and how debt affects married or divorced couples. Start a joint budget.