Pacheco Perez P.A.

Divorcing couples need to consider marital debt

One area in which a party in a divorce often benefits from legal counsel is in an experienced attorney's close and thorough analysis of marital debt.

Consider the following scenario. A couple is divorcing. Their divorce settlement agreement provides that one of them will assume all the marital debt. During their marriage, the couple opened several credit card accounts pursuant to which they agreed to be jointly responsible for payments.

Now, following divorce, the ex-spouse who agreed to make the payments unilaterally is refusing to do so, and the credit card company is looking to the party excused under the divorce agreement from paying for payment.

Notwithstanding the divorce decree, is that former spouse still liable for the debt?

Unfortunately, and in a word, yes. Frankly, the credit card company does not care a whim about a divorce agreement or what it says. As a creditor, it looks to the existing agreement it executed with the card holders. If that contract provides that both parties are liable for the debt, it will seek payment from both. A divorce agreement does not legally alter the terms of an existing and bona- fide agreement executed with creditors.

An experienced divorce attorney will anticipate that possibility if it exists, as well as help a divorcing party identify where other problems potentially exist concerning jointly held debt. It may be a good idea to eliminate all joint debt prior to a divorce. Perhaps both parties should open separate credit card accounts. Another strategy might be recommended concerning how to deal with a home mortgage or car loan in both names. Sometimes a bankruptcy filing might make sense for an individual.

The point: Finances can -- and often do -- play a central role in divorce. It is wise to have a well experienced attorney scrutinize them and discuss strategies for dealing with them.

Related Resource: CreditCards.com "Your Credit Card Agreement Trumps Your Divorce Decree" Aug. 30, 2011

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