Bartholomew & Wasznicky LLP
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Could you be saddled with joint debts after divorce?

It almost goes without saying that you must protect your financial interests in a divorce. This can be accomplished by securing spousal or child support, or by ensuring that your marital property is divided equally.  However, while working to reach a financial settlement, divorcing parties must make certain that jointly held debts do not affect them in the future.

With that, there are two important considerations that divorcees should be aware.

Creditors don't care about your court order - The responsibility to pay off joint credit cards or outstanding loans remains with divorcing parties, regardless of what a court order may specify in dividing debts. After all, a credit agreement is a separate contract that may not be altered by a family court judge, so it does necessarily apply to a third party creditor.

Carefully consider an indemnity clause - An indemnity clause can be especially helpful if third parties attempt to bring suit against you in if your ex-spouse defaults on payments promised to a creditor. It essentially will create a cause of action to seek a judgment for any amount of fees, penalties and interest that you may be saddled with in the event of a default.

These considerations are especially important given the many promises that are made, and even reduced to writing and secured in a court order. After all, your ex's financial circumstances could take a turn for the worst in the future, and such changes may affect you even though you are no longer married.

The preceding is for informational purposes only and is not legal advice.

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