Virtually everyone has heard other people lamenting about what assets or belongings they lost to their former spouse as part of their divorce settlement. As so much attention is given to the division of assets in a divorce, it seems that many people forget or never even think about the fact that debts, too, must be split between spouses when their marriage ends.
For most couples, an agreement to a property division settlement cannot be reached without deciding how to handle all debts as well as all assets. One person may end up with a greater share of the marital assets, but they may also end up with a greater share of the marital debt to compensate for any disparity. Regardless of who is required to pay what debt, proper handling of all credit accounts is imperative.
As explained by Money Management International, spouses should not rely on a divorce decree to be the sole record of which spouse must pay which debt as creditors need not be bound by the terms of a divorce decree. If one person was ordered to pay a couple’s credit card but failed to do so, the bank could pursue repayment from the other spouse if both names remained on the account. For this reason, paying off all debt during the divorce or transferring debt to an account in one person’s name is recommended.
SoFi indicates that the official date of separation may play into what debt a couple needs to divide as debt incurred after this date may not be the responsibility of both parties.