Debt and Divorce
Most people know that any divorce settlement involves determining who will be responsible for each of the marital debts. But some people may be surprised to learn that if your spouse fails to meet their debt obligations, creditors may call you for payment. This is true because of the fact that both names appear on the debt. While your spouse or ex-spouse may have agreed to take on the responsibility for a particular bill, your name may still be tied to the debt, and failure to pay can negatively affect your credit rating.
For example, assume a wife lives in the former marital home and agrees to pay the water bill and other utilities. When the wife fails to pay the water bill, it would seem like the wife's problem. But if the husband originally set up the utilities, the water company may still show him as the responsible party. He may receive phone calls from debt collectors, and may even be sued if the debt isn't paid.
These problems can be solved through anticipation and avoidance. An experienced divorce attorney can help you remove your name from accounts for which you are no longer responsible. It is important to consider this not only for utilities but also for any other type of financial obligation such as mortgages, auto loans, credit cards, department store accounts and cell phone services. In addition, indemnification clauses in your agreement can help shield you from liability by making your spouse fully responsible for the debt at issue. Be sure to discuss these issues with your divorce attorney.
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