A divorce means dividing your debts along with your assets

On behalf of Stange Law Firm, PC posted in divorce on Thursday, June 25, 2015.

With a divorce in Missouri comes many issues that must be dealt with; child custody and support, property division and alimony. Creating a workable parenting plan can be enormously complex as you try to imagine all of the details of your life after a divorce and how you will deal with what summer vacations and what birthdays will be like and how you will work with your former spouse to hand-off your children, should you decide on shared custody.

On the financial side, you need to separate your marital assets in an equitable fashion, which can cause problems, as equitable does not mean even. In addition, while you are dividing all of your assets, don’t neglect your debts. They too must be divided equitably.

One important element to keep in mind concerning your debts is that the obligations are contractual, and that your divorce settlement, which is also a contract, does not rewrite the terms of your credit obligations.

This means that if you have a joint car loan or a joint credit card, you both remain fully responsible for the debt, even if it was your wife’s vehicle and you never drove it or it was your husband’s credit card and you never charged a penny on it.

No matter if your divorce settlement awarded the vehicle to your wife, along with the financial obligation. If she stops paying, the lender can still pursue you for payment.

This is why you need to close all joint accounts and pay off all joint debts, and this includes your mortgage. If you plan to keep the family home, you need to carefully examine all of the financial costs that go along with refinancing as a single person.

This includes the future cost of taxes, utilities and maintenance on the home. You may find that with all of the additional financial obligations you may have after a divorce that those costs could prove unmanageable.

Source: credit.com, “What Happens to My Debt If I Get a Divorce?” Leslie Tayne, June 23, 2015

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