When people are going through a divorce, they often think about who will get which assets. They don’t really think about the debts. The fact is that both the asset distribution and the division of debts work hand-in-hand during the divorce.
One thing to consider is that it may be best to liquidate some assets to pay off the marital debts. This can provide each party with a fresh start financially, but it also serves as a self-protection measure of sorts.
Division of debt is a civil matter
The order for the division of debt is a civil matter. This means that the creditor doesn’t have to abide by the terms that are set by the court. Because of this, they can turn to either party for payment for the outstanding debts.
Ex’s non-payment can impact your credit
If it’s not possible to pay off debts during the divorce, each debt will be assigned to a person to pay off. When the assigned party doesn’t pay the debt, the creditor can report the non-payment on the credit report of each party. This means that even after the divorce an ex’s non-payment can have a negative impact on the other party.
The property division process is often one of the more complex things that must be handled during a divorce. Working with someone who understands how to handle these challenging decisions may make it easier to do what will lead to the most secure financial future for each party.