If you and your soon-to-be former spouse are able to have reasonable discussions about the division of your assets as you approach your divorce, you are fortunate. However, there may be something you are overlooking. Just like the assets acquired during your marriage, the debts accumulated from your wedding day forward are marital property, and the court divides them equitably in states like Minnesota.
In many cases, even if your spouse was the one who applied for the credit card or took out the loan, you may still be responsible for the debt by virtue of your marriage. During divorce proceedings, the court will equitably divide your assets and your debts, and each of you will have certain payments for which you will be responsible. It is important to know that, in most cases, divorce decrees and their separation of debt do not bind creditors.
If you were a party to a loan or your name is on a joint credit account with your former spouse, those creditors may hold you responsible when your former partner misses a payment. This includes car payments and mortgages. Many divorcing couples find that they can’t handle a mortgage payment on their own, so they may have to discuss what to do with the house. Some options for dealing with a joint mortgage include:
- Refinancing the loan in your own name if your finances allow
- Trying to pay off the mortgage before the divorce becomes final
- Selling the house
- Keeping the mortgage in both names but only the one who lives in the house takes responsibility for the payments
Remember that, even if your spouse offers or is ordered to take over the mortgage payments, the mortgage holder may still come after you if your spouse is unable to pay or simply decides to stop paying.
Fair and equitable distribution
While it may not be the most pressing thing on your mind as you go through your divorce, the division of your marital assets and debts may very well play an important role in your future financial stability. Ensuring that you receive fair consideration during your settlement procedures is not something you want to leave to chance.
Working with a family law attorney is the best way to protect your rights and interests during this time of high emotion and uncertainty. If legal issues or conflicts arise that you find confusing, you can rely on the counsel of your lawyer to help you make knowledgeable decisions for a positive future.